Item 8. Consolidated Financial Statements and Supplementary Data

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Item 8. Consolidated Financial Statements and Supplementary Data

Index to Consolidated Financial Statements and Schedule

Verisk Analytics, Inc. Consolidated Financial Statements as of December 31, 2021 and 2020 and for the Years Ended December 31, 2021, 2020, and 2019.
Report of Independent Registered Public Accounting Firm (PCAOB ID No. 34)	52
Consolidated Balance Sheets	54
Consolidated Statements of Operations	55
Consolidated Statements of Comprehensive Income	56
Consolidated Statements of Changes in Stockholders' Equity	57
Consolidated Statements of Cash Flows	58
Notes to Consolidated Financial Statements	60
Financial Statements Schedule
Schedule II, Valuation and Qualifying Accounts and Reserves	96

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Stockholders and the Board of Directors of Verisk Analytics, Inc.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance sheets of Verisk Analytics, Inc. and subsidiaries (the "Company") as of December 31, 2021 and 2020, the related consolidated statements of operations, comprehensive income, stockholders' equity, and cash flows, for each of the three years in the period ended December 31, 2021, and the related notes and the schedule listed in the Index at Item 15 (collectively referred to as the "financial statements"). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and 2020, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2021, in conformity with accounting principles generally accepted in the United States of America.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company's internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission and our report dated February 22, 2022, expressed an unqualified opinion on the Company's internal control over financial reporting.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our audits. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current-period audit of the financial statements that was communicated or required to be communicated to the audit committee and that (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates.

Goodwill - Energy and Specialized Markets and Financial Services Reportable Segments - Refer to Notes 2 and 12 to the financial statements

Critical Audit Matter Description

The Company’s evaluation of goodwill for impairment involves the comparison of the fair value of each reporting unit to its carrying value. The Company determines the fair value of its reporting units using the discounted cash flow model and the market approach. The determination of fair value using the discounted cash flow model requires management to make significant estimates and assumptions related to forecasts of future revenues, EBITDA margins, and the discount rate. The determination of fair value using the market approach requires management to make significant estimates and assumptions related to the selection of revenue and EBITDA multiples. Changes in these assumptions could have a significant impact on either the fair value, the amount of any goodwill impairment charge, or both. The goodwill balance was $4,331.2 million as of December 31, 2021 of which $2,283.6 million was attributable to a reporting unit within the Energy and Specialized Markets reportable segment and $475.4 million was attributable to the Financial Services reportable segment.

Given the significant judgments made by management to estimate the fair value of the reporting unit within the Energy and Specialized Markets reportable segment and the Financial Services reportable segment, including management’s judgments in selecting significant assumptions to forecast future revenues, EBITDA margins, and the discount rate, as well as the selection of revenue and EBITDA multiples, performing audit procedures to evaluate the reasonableness of management’s estimates and assumptions for the reporting unit within the Energy and Specialized Markets reportable segment and the Financial Services reportable segment required a high degree of auditor judgment and an increased extent of effort, including the need to involve our fair value specialists.

How the Critical Audit Matter was addressed in the Audit

Our audit procedures related to forecasts of future revenue and EBITDA margin, selection of the discount rate used within the income approach and selection of the Revenue and EBITDA multiples used in the market approach for a reporting unit within the Energy and Specialized Markets reportable segment and the Financial Services reportable segment included the following, among others:

	•	We tested the effectiveness of controls over management’s goodwill impairment evaluation, including those over the determination of the fair value of the reporting unit within the Energy and Specialized Markets reportable segment and the Financial Services reportable segment such as controls related to management’s selection of the discount rate, forecasts of future revenue and Revenue and EBITDA multiples.
	•	We evaluated management’s ability to accurately forecast future revenues and EBITDA margins by comparing actual results to management’s historical forecasts.
	•	We evaluated the reasonableness of management’s revenue and EBITDA margin forecasts by comparing the forecasts to:

	◦	Historical revenues and EBITDA margins.
	◦	Internal communications to management and the Board of Directors.
	◦	Forecasted information included in Company press releases, as well as in analyst and industry reports for the Company and certain peer companies.

	•	With the assistance of our fair value specialists, we evaluated the reasonableness of the (1) valuation methodologies (2) Revenue and EBITDA multiples and (3) the discount rate by:

	◦	Testing the source information underlying the determination of the discount rate, the selection of the Revenue and EBITDA multiples and the mathematical accuracy of the calculations.
	◦	Developing a range of independent estimates and comparing those to the discount rate selected by management.

/s/ Deloitte & Touche LLP

Parsippany, New Jersey

February 22, 2022

We have served as the Company's auditor since 2001.

VERISK ANALYTICS, INC.

CONSOLIDATED BALANCE SHEETS

As of December 31, 2021 and 2020

	*2021*			*2020*
	(in millions, except par value and number of shares)
ASSETS:
Current assets:
Cash and cash equivalents	$	280.3		$	218.8
Accounts receivable, net		446.3			432.4
Prepaid expenses		102.6			81.2
Income taxes receivable		36.7			25.4
Other current assets		36.7			36.4
Total current assets		902.6			794.2
Noncurrent assets:
Fixed assets, net		658.2			632.3
Operating lease right-of-use assets, net		253.1			267.6
Intangible assets, net		1,225.9			1,384.8
Goodwill		4,331.2			4,108.1
Deferred income tax assets		6.6			9.1
Other noncurrent assets		430.5			365.7
Total assets	$	7,808.1		$	7,561.8

LIABILITIES AND STOCKHOLDERS’ EQUITY:
Current liabilities:
Accounts payable and accrued liabilities	$	320.7		$	407.3
Short-term debt and current portion of long-term debt		971.3			514.3
Deferred revenues		501.0			466.7
Operating lease liabilities		41.2			38.7
Income taxes payable		9.0			3.8
Total current liabilities		1,843.2			1,430.8
Noncurrent liabilities:
Long-term debt		2,342.8			2,699.6
Deferred income tax liabilities		470.5			396.9
Operating lease liabilities		254.7			271.6
Other noncurrent liabilities		54.4			64.7
Total liabilities		4,965.6			4,863.6
Commitments and contingencies (Note 21)
Stockholders’ equity:
Common stock, $.001 par value; 2,000,000,000 shares authorized; 544,003,038 shares issued; 161,651,639 and 162,817,526 shares outstanding, respectively		0.1			0.1
Additional paid-in capital		2,608.7			2,490.9
Treasury stock, at cost, 382,351,399 and 381,185,512 shares, respectively		(4,638.1	)		(4,179.3	)
Retained earnings		5,240.4			4,762.2
Accumulated other comprehensive losses		(394.6	)		(375.7	)
Total Verisk stockholders' equity		2,816.5			2,698.2
Noncontrolling interests		26.0			—
Total stockholders’ equity		2,842.5			2,698.2
Total liabilities and stockholders’ equity	$	7,808.1		$	7,561.8

The accompanying notes are an integral part of these consolidated financial statements.

VERISK ANALYTICS, INC.

CONSOLIDATED STATEMENTS OF OPERATIONS

For The Years Ended December 31, 2021, 2020, and 2019

	*2021*			*2020*			*2019*
	(in millions, except per share amounts and number of shares)
Revenues	$	2,998.6		$	2,784.6		$	2,607.1
Operating expenses:
Cost of revenues (exclusive of items shown separately below)		1,057.8			993.9			976.8
Selling, general and administrative		422.7			413.9			603.5
Depreciation and amortization of fixed assets		206.9			192.2			185.7
Amortization of intangible assets		176.7			165.9			138.0
Other operating loss (income)		134.0			(19.4	)		6.2
Total operating expenses		1,998.1			1,746.5			1,910.2
Operating income		1,000.5			1,038.1			696.9
Other income (expense):
Investment income (loss) and others, net		1.9			(2.4	)		(1.7	)
Interest expense		(127.0	)		(138.2	)		(126.8	)
Total other expense, net		(125.1	)		(140.6	)		(128.5	)
Income before income taxes		875.4			897.5			568.4
Provision for income taxes		(209.1	)		(184.8	)		(118.5	)
Net income		666.3			712.7			449.9
Less: Net income attributable to noncontrolling interests		(0.1	)		—			—
Net income attributable to Verisk	$	666.2		$	712.7		$	449.9
Basic net income per share attributable to Verisk	$	4.12		$	4.38		$	2.75
Diluted net income per share attributable to Verisk	$	4.08		$	4.31		$	2.70
Weighted average shares outstanding:
Basic		161,841,441			162,610,586			163,535,438
Diluted		163,338,909			165,320,709			166,560,115

The accompanying notes are an integral part of these consolidated financial statements.

VERISK ANALYTICS, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

For The Years Ended December 31, 2021, 2020, and 2019

	*2021*			*2020*		*2019*
	(in millions)
Net income	$	666.3		$	712.7	$	449.9
Other comprehensive (loss) income, net of tax:
Foreign currency translation adjustment		(46.3	)		107.9		88.4
Pension and postretirement liability adjustment		26.9			3.3		16.6
Total other comprehensive (loss) income		(19.4	)		111.2		105.0
Comprehensive income		646.9			823.9		554.9
Less: Comprehensive loss attributable to noncontrolling interests		0.4			—		—
Comprehensive income attributable to Verisk	$	647.3		$	823.9	$	554.9

The accompanying notes are an integral part of these consolidated financial statements.

VERISK ANALYTICS, INC.

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS’ EQUITY

For The Years Ended December 31, 2021, 2020, and 2019

		*Par Value*		*Additional Paid-in Capital*			*Treasury Stock*			*Retained Earnings*			*Accumulated Other Comprehensive Losses*			*Total Verisk Stockholders' Equity*			*Noncontrolling Interests*			*Total Stockholders’ Equity*
		(in millions, except for share data)
Balance as of January 1, 2019	544,003,038	$	0.1	$	2,283.0		$	(3,563.2	)	$	3,942.6		$	(591.9	)	$	2,070.6		$	—		$	2,070.6
Net income	—		—		—			—			449.9			—			449.9			—			449.9
Common stock dividend (1)	—		—		—			—			(164.1	)		—			(164.1	)		—			(164.1	)
Other comprehensive income	—		—		—			—			—			105.0			105.0			—			105.0
Treasury stock acquired (2,178,151 shares)	—		—		—			(300.0	)		—			—			(300.0	)		—			(300.0	)
Stock options exercised (1,131,970 shares transferred from treasury stock)	—		—		46.9			11.0			—			—			57.9			—			57.9
Restricted stock lapsed (192,109 shares transferred from treasury stock)	—		—		(1.8	)		1.8			—			—			—			—			—
Stock-based compensation	—		—		42.7			—			—			—			42.7			—			42.7
Net share settlement from restricted stock awards (40,578 shares withheld for tax settlement)	—		—		(5.5	)		—			—			—			(5.5	)		—			(5.5	)
Other stock issuances (45,226 shares transferred from treasury stock)	—		—		3.8			0.5			—			—			4.3			—			4.3
Balance as of December 31, 2019	544,003,038		0.1		2,369.1			(3,849.9	)		4,228.4			(486.9	)		2,260.8			—			2,260.8
Adjustment to opening retained earnings related to Topic 326	—		—		—			—			(2.4	)		—			(2.4	)		—			(2.4	)
Net income	—		—		—			—			712.7			—			712.7			—			712.7
Common stock dividend (1)	—		—		—			—			(176.5	)		—			(176.5	)		—			(176.5	)
Other comprehensive income	—		—		—			—			—			111.2			111.2			—			111.2
Treasury stock acquired (2,155,084 shares)	—		—		—			(348.8	)		—			—			(348.8	)		—			(348.8	)
Stock options exercised (1,623,740 shares transferred from treasury stock)	—		—		74.9			17.3			—			—			92.2			—			92.2
Restricted stock lapsed (142,362 shares transferred from treasury stock)	—		—		(1.5	)		1.5			—			—			—			—			—
Stock-based compensation	—		—		47.6			—			—			—			47.6			—			47.6
Net share settlement from restricted stock awards (27,890 shares withheld for tax settlement)	—		—		(4.1	)		—			—			—			(4.1	)		—			(4.1	)
Other stock issuances (44,944 shares transferred from treasury stock)	—		—		4.9			0.6			—			—			5.5			—			5.5
Balance as of December 31, 2020	544,003,038		0.1		2,490.9			(4,179.3	)		4,762.2			(375.7	)		2,698.2			—			2,698.2
Net income	—		—		—			—			666.2			—			666.2			0.1			666.3
Other comprehensive loss	—		—		—			—			—			(18.9	)		(18.9	)		(0.5	)		(19.4	)
Investment in noncontrolling interests	—		—		—			—			—			—			—			26.4			26.4
Common stock dividend (1)	—		—		—			—			(188.0	)		—			(188.0	)		—			(188.0	)
Treasury stock acquired (2,545,191 shares)	—		—		—			(475.0	)		—			—			(475.0	)		—			(475.0	)
Stock options exercised (1,146,368 shares transferred from treasury stock)	—		—		70.4			13.6			—			—			84.0			—			84.0
Restricted stock and performance share units lapsed (186,562 shares transferred from treasury stock)	—		—		(2.1	)		2.1			—			—			—			—			—
Stock-based compensation expense	—		—		55.7			—			—			—			55.7			—			55.7
Net share settlement from restricted stock awards (60,101 shares withheld for tax settlement)	—		—		(11.8	)		—			—			—			(11.8	)		—			(11.8	)
Other stock issuances (46,374 shares transferred from treasury stock)	—		—		5.6			0.5			—			—			6.1			—			6.1
Balance as of December 31, 2021	544,003,038	$	0.1	$	2,608.7		$	(4,638.1	)	$	5,240.4		$	(394.6	)	$	2,816.5		$	26.0		$	2,842.5

(1) Refer to Note 16. Stockholders' Equity for discussion related to quarterly cash dividends declared per share

The accompanying notes are an integral part of these consolidated financial statements.

VERISK ANALYTICS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

For The Years Ended December 31, 2021, 2020, and 2019

	*2021*			*2020*			*2019*
	(In millions)
Cash flows from operating activities:
Net income	$	666.3		$	712.7		$	449.9
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization of fixed assets		206.9			192.2			185.7
Amortization of intangible assets		176.7			165.9			138.0
Amortization of debt issuance costs and original issue discount, net of original issue premium		1.4			1.8			3.9
Provision for doubtful accounts		17.7			13.1			7.2
(Gain) loss from sale of assets		—			(19.4	)		6.2
Stock-based compensation expense		55.7			47.6			42.7
Realized gain on available-for-sale securities, net		—			—			(0.9	)
Impairment of long-lived assets		134.0			—			—
Deferred income taxes		49.8			31.1			(29.3	)
Loss on disposal of fixed assets, net		0.4			0.6			0.3
Changes in assets and liabilities, net of effects from acquisitions:
Accounts receivable		(29.7	)		1.8			(70.3	)
Prepaid expenses and other assets		(33.6	)		(66.5	)		(19.7	)
Operating lease right-of-use assets, net		41.3			43.1			51.3
Income taxes		(5.7	)		(0.5	)		15.0
Acquisition-related liabilities		—			(77.0	)		70.4
Accounts payable and accrued liabilities		(80.8	)		24.3			150.9
Deferred revenues		32.4			21.2			11.4
Operating lease liabilities		(41.3	)		(29.6	)		(49.5	)
Other liabilities		(35.8	)		5.8			(6.9	)
Net cash provided by operating activities		1,155.7			1068.2			956.3
Cash flows from investing activities:
Acquisitions and purchases of controlling interests, net of cash acquired of $9.3, $11.1, and $10.4, respectively		(289.8	)		(275.8	)		(699.2	)
Proceeds from sale of assets		—			23.1			—
Investments in nonpublic companies		(23.6	)		(94.8	)		—
Escrow funding associated with acquisitions		(9.2	)		(9.3	)		(4.5	)
Capital expenditures		(268.4	)		(246.8	)		(216.8	)
Payment of contingent liability related to acquisitions		(1.2	)		—			—
Other investing activities, net		0.2			7.8			(7.4	)
Net cash used in investing activities		(592.0	)		(595.8	)		(927.9	)

The accompanying notes are an integral part of these consolidated financial statements.

VERISK ANALYTICS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)

For The Years Ended December 31, 2021, 2020, and 2019

	*2021*			*2020*			*2019*
	(in millions)
Cash flows from financing activities:
Proceeds from (repayment of) short-term debt, net		560.0			(445.0	)		80.0
Repayments of current portion of long-term debt		(450.0	)		—			(250.0	)
Proceeds from issuance of long-term debt, inclusive of original issue premium and net of original issue discount		—			494.8			619.7
Proceeds from issuance of short-term debt with original maturities greater than three months		—			20.0			—
Repayment of short-term debt with original maturities greater than three months		—			(20.0	)		—
Payment of debt issuance costs		—			(5.7	)		(6.3	)
Repurchases of common stock		(475.0	)		(348.8	)		(300.0	)
Net share settlement of taxes from restricted stock and performance share awards		(11.8	)		(4.1	)		(5.5	)
Payment of contingent liability related to acquisitions		—			(34.2	)		—
Proceeds from stock options exercised		84.3			88.0			52.4
Dividends paid		(188.2	)		(175.8	)		(163.5	)
Other financing activities, net		(18.2	)		(14.4	)		(15.9	)
Net cash (used in) provided by financing activities		(498.9	)		(445.2	)		10.9
Effect of exchange rate changes		(3.3	)		6.7			6.1
Net increase in cash and cash equivalents, including cash classified within current assets held for sale		61.5			33.9			45.4
Increase (decrease) in cash classified within current assets held for sale		—			0.3			(0.3	)
Increase in cash and cash equivalents		61.5			34.2			45.1
Cash and cash equivalents, beginning of period		218.8			184.6			139.5
Cash and cash equivalents, end of period	$	280.3		$	218.8		$	184.6
Supplemental disclosures:
Income taxes paid	$	175.0		$	156.5		$	139.8
Interest paid	$	129.0		$	134.3		$	119.9
Noncash investing and financing activities:
Deferred tax liability established on date of acquisitions	$	21.0		$	13.0		$	43.4
Right-of-use assets obtained in exchange for new operating lease liabilities	$	—		$	—		$	247.6
Finance lease additions, net of disposals	$	7.0		$	30.9		$	20.2
Operating lease additions, net of terminations	$	22.4		$	87.8		$	13.7
Tenant improvements included in Operating lease right-of-use assets, net	$	—		$	—		$	1.7
Fixed assets included in accounts payable and accrued liabilities	$	5.3		$	0.8		$	1.6
Noncash contribution of assets for a nonpublic company	$	—		$	65.9		$	—

The accompanying notes are an integral part of these consolidated financial statements.

VERISK ANALYTICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Amounts in millions, except for share and per share data, unless otherwise stated)

1. Organization:

Verisk Analytics, Inc. is a data analytics provider serving customers in insurance, energy and specialized markets, and financial services. Using various technologies to collect and analyze billions of records, we draw on numerous data assets and domain expertise to provide first-to-market innovations that are integrated into customer workflows. We offer predictive analytics and decision support solutions to customers in rating, underwriting, claims, catastrophe and weather risk, global risk analytics, natural resources intelligence, economic forecasting, commercial banking and finance, and many other fields. Around the world, we help customers protect people, property, and financial assets.

We were established to serve as the parent holding company of Insurance Services Office, Inc. (“ISO”) upon completion of the initial public offering (“IPO”), which occurred on October 9, 2009. ISO was formed in 1971 as an advisory and rating organization for the property and casualty ("P&C") insurance industry to provide statistical and actuarial services, to develop insurance programs, and to assist insurance companies in meeting state regulatory requirements. Over the past decade, we broadened our data assets, entered new markets, placed a greater emphasis on analytics, and pursued strategic acquisitions. We trade under the ticker symbol “VRSK” on the Nasdaq Global Select Market.

Since January 2020, an outbreak of the 2019 novel coronavirus ("COVID-19") has evolved into a worldwide pandemic. We have modified our operations in line with our business continuity plans due to COVID-19. While our facilities generally remain open, we are making extensive use of the work-from-home model at this moment. On a daily basis, management is reviewing our operations and there have been to date minimal interruptions in our customer-facing operations. Given the digital nature of our business and the move toward cloud enablement, we expect to remain operationally stable and fully available to our customers. We are in compliance with all financial and non-financial covenants and have not observed a loss of any significant customers, a significant deterioration in the collectability of receivables, a significant reduction in our liquidity, nor a significant decline in subscription renewal rates.

2. Basis of Presentation and Summary of Significant Accounting Policies:

Our accompanying consolidated financial statements have been prepared on the basis of accounting principles generally accepted in the United States of America (“U.S. GAAP”). The preparation of financial statements in conformity with these accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting periods. Significant estimates include acquisition purchase price allocations, the fair value of goodwill, the realization of deferred tax assets and liabilities, acquisition-related liabilities, fair value of stock-based compensation for equity awards granted, and assets and liabilities for pension and postretirement benefits. Actual results may ultimately differ from those estimates. Certain reclassifications, including combining acquisition-related liabilities into the "Accounts payable and accrued liabilities" line in 2021 (they used to be shown as a separate line item) and moving Atmospheric and Environmental Research ("AER"), an immaterial component, from the Energy and Specialized Markets segment to the underwriting and rating category within the Insurance segment, have been made within our consolidated balance sheets, consolidated statements of operations, consolidated statements of cash flows, and in our notes to conform to our respective 2021 presentation.

Significant accounting policies include the following:

(a) Intercompany Accounts and Transactions

The consolidated financial statements include all of our accounts. All intercompany accounts and transactions have been eliminated.

(b) Revenue Recognition

The following describes our primary types of revenues and the applicable revenue recognition policies. We recognize revenues through recurring and non-recurring long-term agreements (generally one to five years) for hosted subscriptions, advisory/consulting services, and for transactional solutions. Each of our reportable segments, Insurance, Energy and Specialized Markets, and Financial Services, has a portion of its revenue from more than one of these revenue types. Our revenues are primarily derived from the sale of services where revenue is recognized when control of the promised services is transferred to customers in an amount that reflects the consideration that we expect to be entitled to in exchange for those services. Fees for services provided by us are non-refundable. Revenue is recognized net of applicable sales tax withholdings.

Hosted Subscriptions

We offer two forms of hosted subscriptions. The first and most prevalent form of hosted subscription is where customers access content only through our online portal (the "Hosted Subscription"). We grant a license to our customer to enter our online portal. The license is a contractual mechanism that allows our customer to access our online portal for a defined period of time. As the license alone does not provide utility to our customer, our customer has no contractual right to take possession of our online portal at any time, and our customer cannot engage another party to host our online portal and related content, it is not considered a functional license under Topic 606. Our promise to our customer is to provide continuous access to our online portal and to update the content throughout the subscription period. Hosted Subscription is a single performance obligation that represents a series of distinct services (daily access to our online portal and related content) that are substantially the same and that have the same pattern of transfer to our customer. We recognize revenue for Hosted Subscriptions ratably over the subscription period on a straight-line basis as services are performed and continuous access to information in our online portal is provided over the entire term of the agreements.

VERISK ANALYTICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The second form of hosted subscription is where customers have access to our online portals combined with software content that is delivered via disk drive/download to our customer (“Hosted Subscription with Disk Drive/Download”) and is offered only on a limited basis. For this form of hosted subscription, we also grant our customer a license to enter our online portal as well as access the software content as needed and act as the same contractual mechanism as described for Hosted Subscriptions. The Hosted Subscription with Disk Drive/Download works in such a manner that our customer gains significant benefit, functionality, and overall utility only when the online portal and the software content are used together. The disk drive/download contains the models while the online portal contains the latest data and research which is updated throughout the subscription period. The models within the disk drive/download depend on the data and research contained within our online portal. The data and research within our online portal is only useful when our customer can utilize it within the models (e.g., queries, projections, etc.) so that they may use the most current information and alerts to forecast potential future losses. The software content is only sold together with our online portal to provide a highly interdependent and interrelated promise and therefore represents a single performance obligation. As our customer has no contractual right to take possession of our online portal at any time, and our customer cannot engage another party to host our online portal and related software content, it is not considered a functional license under Topic 606. Our promise to our customer is to deliver the disk drive/download, to provide continuous access to our online portal, and to update the software content throughout the subscription period. We recognize revenue for Hosted Subscriptions with Disk Drive/Download ratably over the subscription period on a straight-line basis as services are performed and continuous access to information is provided over the entire term of the agreements.

Subscriptions are generally paid in advance of rendering services either quarterly or annually upon commencement of the subscription period, which is usually for one year and in most instances automatically renewed each year.

Advisory/Consulting Services

We provide certain discrete project based advisory/consulting services, which are recognized over time by measuring the progress toward complete satisfaction of the performance obligation, based on the input method of consulting hours worked; this aligns with the results achieved and value transferred to our customer. The hours consumed are most reflective of the measure of progress towards satisfying the performance obligation, as the resources hours worked directly tie to the progress of the services to be provided. In general, they are billed over the course of the project.

Transactional Solutions

Certain solutions are also paid for by customers on a transactional basis. We recognize these revenues as the solutions are delivered or services performed at a point in time. In general, our customers are billed monthly at the end of each month.

We invoice our customers in annual, quarterly, monthly, or milestone installments. Amounts billed and/or collected in advance of services being provided are recorded as “Deferred revenues” and “Other noncurrent liabilities” in our accompanying consolidated balance sheets and are recognized as the services are performed, control is transferred to customers, and the applicable revenue recognition criteria is met.

(d) Accounts Receivable and Allowance for Doubtful Accounts

Accounts receivable are generally recorded at the invoiced amount. Unbilled receivables are short-term in nature and expected to be billed within one year. The allowance for doubtful accounts or expected credit losses is estimated based on an analysis of the aging of the accounts receivable, historical write-offs, customer payment patterns, individual customer credit worthiness, current economic trends, reasonable and supportable forecasts of future economic conditions, and/or establishment of specific reserves for customers in adverse financial condition. We assess the adequacy of the allowance for doubtful accounts on a quarterly basis.

(e) Deferred Commissions

We recognize an asset for the incremental costs of obtaining a contract with a customer if we expect the benefit of those costs to be longer than one year. We have determined that certain sales incentive programs meet the requirements to be capitalized. The incremental costs of obtaining a contract with a customer, which primarily consist of sales commissions, are deferred and amortized over a useful life of five years that is consistent with the transfer to our customer the services to which the asset relates. We classify deferred commissions as current or noncurrent based on the timing of expense recognition. The current and noncurrent portions of deferred commissions are included in "Prepaid expenses" and "Other noncurrent assets", respectively, in our consolidated balance sheets as of December 31, 2021. Amortization expense related to deferred commissions is computed on a straight-line basis over its estimated useful lives and included in "Selling, general and administrative" within our accompanying consolidated statements of operations.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(f) Fixed Assets and Finite-lived Intangible Assets

Fixed assets and finite-lived intangibles are stated at cost less accumulated depreciation and amortization, which are computed on a straight-line basis over their estimated useful lives. Leasehold improvements are amortized over the shorter of the useful life of the asset or the lease term.

Our internal software development costs primarily relate to internal-use software. Such costs are capitalized in the application development stage in accordance with ASC 350-40, Internal-use Software ("ASC 350-40"). We also capitalize software development costs upon the establishment of technological feasibility for a product in accordance with ASC 985-20, Software to be Sold, Leased, or Marketed (“ASC 985-20”). Software development costs are amortized on a straight-line basis.

In accordance with ASC 360, Property, Plant & Equipment, whenever events or changes in circumstances indicate that the carrying amount of long-lived assets and finite-lived intangible assets may not be recoverable, we review our long-lived assets and finite-lived intangible assets for impairment by first comparing the carrying value of our assets to the sum of the undiscounted cash flows expected to result from the use and eventual disposition of our assets. If the carrying value exceeds the sum of our assets’ undiscounted cash flows, we estimate and recognize an impairment loss by taking the difference between the carrying value and fair value of our assets.

(g) Leases

We have operating and finance leases for corporate offices, data centers, and certain equipment that are accounted for under ASC 842. The lease term for our corporate headquarters ends in 2033 and includes the options to extend for one 10-year renewal period and two 5-year renewal periods. The lease of our Hyderabad, India office may be terminated in six months without penalty. Extension and termination options are considered in our calculation of the right-of-use (“ROU”) assets and lease liabilities when we determine it is reasonably certain that we will exercise those options.

We determine if an arrangement is a lease at inception. We consider any contract where there is an identified asset and that it has the right to control the use of such asset in determining whether the contract contains a lease. A ROU asset represents our right to use an underlying asset for the lease term and the lease liabilities represent our obligation to make lease payments arising from the lease. Operating lease ROU assets and lease liabilities are recognized at commencement date based on the present value of lease payments over the lease term. As our operating leases do not provide an implicit rate, we use an incremental borrowing rate based on the information available on the adoption date in determining the present value of lease payments. The incremental borrowing rate was calculated by using our credit rating on our publicly-traded U.S. unsecured bonds and estimating an appropriate credit rating for similar secured debt instruments. Our calculated credit rating on secured debt instruments determined the yield curve used. We calculated an implied spread and applied the spreads to the risk-free interest rates based on the yield of the U.S. Treasury zero coupon securities with a maturity equal to the remaining lease term in determining the borrowing rates for all operating leases. Our operating lease ROU assets include any lease payments made prior to the rent commencement date and exclude lease incentives. Lease expense for lease payments are recognized on a straight-line basis over the lease term. Operating lease transactions are included in "Operating lease right-of-use assets, net", and "Operating lease liabilities", current and noncurrent, within our accompanying consolidated balance sheets. Finance leases are included in property and equipment under "Fixed assets, net", "Short-term debt and current portion of long-term debt", and "Long-term debt" within our accompanying consolidated balance sheets.

(h) Fair Value of Financial and Non-financial Instruments

We follow the provisions of ASC 820-10, Fair Value Measurements (“ASC 820-10”), which defines fair value, establishes a framework for measuring fair value under U.S. GAAP and expands fair value measurement disclosures. We follow the provisions of ASC 820-10 for our financial assets and liabilities recognized or disclosed at fair value on a recurring basis. We follow the provisions of ASC 820-10 for our non-financial assets and liabilities recognized or disclosed at fair value.

(i) Foreign Currency

We have determined local currencies are the functional currencies of our foreign operations. The assets and liabilities of foreign subsidiaries are translated at the period-end rate of exchange and statement of operations items are translated at the average rates prevailing during the year. The resulting translation adjustment is recorded as a component of “Accumulated other comprehensive losses” in our accompanying consolidated statements of changes in stockholders’ equity.

VERISK ANALYTICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(j) Stock-Based Compensation

We follow ASC 718, Stock Compensation (“ASC 718”). Under ASC 718, stock-based compensation cost is measured at the grant date, based on the fair value of the awards granted, and is recognized as expense over the requisite service period.

Our nonqualified stock options have an exercise price equal to the closing price of our common stock on the grant date, with a ten-year contractual term. The expected term for our stock options granted for a majority of the awards granted was estimated based on studies of historical experience and projected exercise behavior. However, for certain awards granted, for which no historical exercise pattern exists, the expected term was estimated using the simplified method. The risk-free interest rate is based on the yield of U.S. Treasury zero coupon securities with a maturity equal to the expected term of the equity award. The volatility factor is calculated using our historical daily closing prices over the most recent period that is commensurate with the expected term of the stock option awards. The expected dividend yield was based on our expected annual dividend rate on the date of grant.

The fair value of our restricted stock is determined using the closing price of our common stock on the grant date. Our restricted stock is not assignable or transferable until it becomes vested. Restricted stock generally has a service vesting period of four years and we recognize the expense ratably over this service vesting period.

Performance share units (“PSU”) vest at the end of a three-year performance period, subject to the recipient’s continued service. Each PSU represents the right to receive one share of our common stock and the ultimate realization is based on our achievement of certain market performance criteria. We determined the grant date fair value of PSUs with the assistance of a third-party valuation specialist and based on estimates provided by us. The valuation of our PSUs employed the Monte Carlo simulation model, which includes certain key assumptions that were applied to us and our peer group. Those key assumptions included valuation date stock price, expected volatility, correlation coefficients, risk-free rate of return, and expected dividend yield. The valuation date stock price is based on the dividend-adjusted closing price on the grant date. Expected volatility is calculated using historical daily closing prices over a period that is commensurate with the length of the performance period. The correlation coefficients are based on the price data used to calculate the historical volatilities. The risk-free rate of return is based on the yield of U.S. Treasury zero coupon securities with a maturity equal to the length of the performance period. The expected dividend yield was based on our and our peer group’s expected dividend rate over the performance period. PSUs are tied to the achievement of certain market performance conditions, namely relative total shareholder return as compared to the S&P 500 index ("TSR-based PSUs").

We estimate expected forfeitures of equity awards at the date of grant and recognize compensation expense only for those awards expected to vest. The forfeiture assumption is ultimately adjusted to the actual forfeiture rate. Estimated forfeiture is ultimately adjusted to actual forfeiture. Changes in the forfeiture assumptions may impact the total amount of expense ultimately recognized, as well as the timing of expense recognized over the requisite service period.

Excess tax benefit from exercised stock options, lapsing of restricted stock and PSUs is recorded as an income tax benefit in our accompanying consolidated statements of operations. This tax benefit is calculated as the excess of the intrinsic value of options exercised and of the market value of restricted stock lapsed over the compensation recognized for financial reporting purposes.

(k) Research and Development Costs

Research and development costs, which are primarily related to personnel and related overhead costs incurred in developing new services for customers, are expensed as incurred. Such costs were $49.2 million, $48.9 million, and $60.0 million for the years ended December 31, 2021, 2020, and 2019, respectively, and were included in our accompanying consolidated statements of operations.

(l) Advertising Costs

Advertising costs, which are primarily associated with promoting our brand, names and solutions provided, are expensed as incurred. Such costs were $12.0 million, $8.5 million, and $10.7 million for the years ended December 31, 2021, 2020, and 2019, respectively.

(m) Income Taxes

We account for income taxes under the asset and liability method under ASC 740, Income Taxes (“ASC 740”), which requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial statements and tax basis of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income in the period that includes the enactment date.

Deferred tax assets are recorded to the extent these assets are more likely than not to be realized. In making such determination, we consider all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies, and recent financial operations. Valuation allowances are recognized to reduce deferred tax assets if it is determined to be more likely than not that all or some of the potential deferred tax assets will not be realized.

VERISK ANALYTICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

We follow ASC 740-10, Income Taxes (“ASC 740-10”), which clarifies the accounting for uncertainty in income taxes recognized in the financial statements. ASC 740-10 provides that a tax benefit from an uncertain tax position may be recognized based on the technical merits when it is more likely than not that the position will be sustained upon examination, including resolutions of any related appeals or litigation processes. Income tax positions must meet a more likely than not recognition threshold in accordance with ASC 740-10. This standard also provides guidance on measurement, derecognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition.

We recognize interest and penalties related to unrecognized tax benefits within the income tax expense line in our accompanying consolidated statements of operations. Accrued interest and penalties are included within “Other liabilities” on our accompanying consolidated balance sheets.

(n) Earnings Per Share

Basic and diluted earnings per share (“EPS”) are determined in accordance with ASC 260, Earnings per Share, which specifies the computation, presentation and disclosure requirements for EPS. Basic EPS excludes all dilutive common stock equivalents. It is based upon the weighted average number of common shares outstanding during the period. Diluted EPS, as calculated using the treasury stock method, reflects the potential dilution that would occur if our dilutive outstanding stock options and stock awards were issued.

(o) Pension and Postretirement Benefits

We account for our pension and postretirement benefits under ASC 715, Compensation — Retirement Benefits (“ASC 715”). ASC 715 requires the recognition of the funded status of a benefit plan in the balance sheet, the recognition in other comprehensive income (loss) of gains or losses and prior service costs arising during the period, but which are not included as components of periodic benefit cost or credit, and the measurement of defined benefit plan assets and obligations as of the balance sheet date. We utilize a valuation date of December 31.

(p) Product Warranty Obligations

We provide warranty coverage for certain of our solutions. We recognize a product warranty obligation when claims are probable and can be reasonably estimated. As of December 31, 2021 and 2020, product warranty obligations were not material.

In the ordinary course of business, we enter into numerous agreements that contain standard indemnities whereby we indemnify another party for breaches of confidentiality, infringement of intellectual property or gross negligence. Such indemnifications are primarily granted under licensing of computer software. Most agreements contain provisions to limit the maximum potential amount of future payments that we could be required to make under these indemnifications; however, we are not able to develop an estimate of the maximum potential amount of future payments to be made under these indemnifications as the triggering events are not subject to predictability.

(q) Loss Contingencies

We accrue for costs relating to litigation, claims, and other contingent matters when such liabilities become probable and reasonably estimable. Such estimates are based on management’s judgment. Actual amounts paid may differ from amounts estimated, and such differences will be charged to operations in the period in which the final determination of the liability is made.

(r) Goodwill

Goodwill represents the excess of acquisition costs over the fair value of tangible net assets and identifiable intangible assets of our businesses acquired. Goodwill and intangible assets deemed to have indefinite lives are not amortized. Intangible assets determined to have finite lives are amortized over their useful lives. Goodwill and intangible assets with indefinite lives are subject to impairment testing annually as of June 30 or whenever events or changes in circumstances indicate that the carrying amount may not be fully recoverable. We completed the required annual impairment test as of June 30, 2021, which resulted in no impairment of goodwill in 2021. This test compares the carrying value of each reporting unit to its fair value. If the fair value of the reporting unit exceeds the carrying value of our net assets, including goodwill assigned to that reporting unit, goodwill is not impaired. If the carrying value of the reporting unit’s net assets, including goodwill, exceeds the fair value of the reporting unit, then an impairment loss is recorded for the difference between the carrying amount and the fair value of the reporting unit.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

(s) Recent Accounting Pronouncements

Accounting Standard		Description		Effective Date		Effect on Consolidated Financial Statements or Other Significant Matters
Compensation-Retirement Benefits-Defined Benefit Plans - General (Subtopic 715-20) In August 2018, the FASB issued ASU No. 2018-14, "Changes to the Disclosure requirements for defined benefit plans" ("ASU No. 2018-14") Compensation-Retirement Benefits-Defined Benefit Plans - General (Subtopic 715-20) In August 2018, the FASB issued ASU No. 2018-14, "Changes to the Disclosure requirements for defined benefit plans" ("ASU No. 2018-14")		This amendment removes certain disclosures that are not considered cost beneficial and helps clarify certain required disclosures along with adding additional disclosures. This impacts employers that sponsor defined benefit pension and/or other postretirement plans. The amendment clarifies guidance in ASC 715-20-50-3 to disclose projected benefit obligation ("PBO") and accumulated benefit obligation ("ABO").		Fiscal years ending after December 15, 2020 with early adoption permitted.		We adopted ASU No. 2018-14 on December 31, 2020 on a retroactive basis and applied to each comparative period presented in our Consolidated Financial Statements. The adoption of ASU No. 2018-14 did not have a material impact on our Consolidated Financial Statements.
Income Tax (Topic 740) In December 2019, FASB issued ASU No. 2019-12, "Simplifying the Accounting for Income Taxes" ("ASU No. 2019-12") Income Tax (Topic 740) In December 2019, FASB issued ASU No. 2019-12, "Simplifying the Accounting for Income Taxes" ("ASU No. 2019-12")		The amendments in this guidance reflect the FASB’s effort to reduce the complexity of accounting standards while maintaining or enhancing the helpfulness of information provided to financial statement users. Changes include treatment of Hybrid tax regimes, tax basis step-up in goodwill obtained in a transaction that is not a business combination, separate financial statements of legal entities not subject to tax, intraperiod tax allocation, ownership changes in investments, interim-period accounting for enacted changes in tax law, year-to-date loss limitation in interim-period tax accounting, income statement presentation of tax benefits of tax-deductible dividends, and impairment of investment in qualified affordable housing projects accounted for under the equity method.		Fiscal years beginning after December 15, 2020 with early adoption permitted.		We adopted this amendment on January 1, 2021 on a prospective basis. We evaluated ASU No. 2019-12 and determined that there was no material impact on our Consolidated Financial Statements.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

3. Cash and Cash Equivalents:

Cash and cash equivalents consist of cash in banks, commercial paper, money-market funds, and other liquid instruments with original maturities of 90 days or less at the time of purchase.

4. Accounts Receivable:

Accounts receivable, net consisted of the following at December 31:

	*2021*			*2020*
Billed receivables	$	395.5		$	380.5
Unbilled receivables		72.1			69.6
Total receivables		467.6			450.1
Less allowance for doubtful accounts		(21.3	)		(17.7	)
Accounts receivable, net	$	446.3		$	432.4

5. Concentration of Credit Risk:

Financial instruments that potentially expose us to credit risk consist primarily of cash and cash equivalents as well as accounts receivable, net which are generally not collateralized. We maintain our cash and cash equivalents in higher credit quality financial institutions in order to limit the amount of credit exposure. The total domestic cash balances are insured by the Federal Deposit Insurance Corporation (“FDIC”) to a maximum amount of $250.0 thousand per bank as of December 31, 2021 and 2020. As of December 31, 2021 and 2020, we had cash balances on deposit with fifteen and ten banks that exceeded the balance insured by the FDIC limit by approximately$40.3 million and $92.8 million, respectively. As of December 31, 2021 and 2020, we also had cash on deposit with foreign banks of approximately $240.4 million and $122.5 million, respectively.

We consider the concentration of credit risk associated with our accounts receivable to be commercially reasonable and believe that such concentration does not result in the significant risk of near-term severe adverse impacts. Our top fifty customers represent approximately 32% of revenues for 2021 and 33% for 2020 and 2019, respectively, with no individual customer accounting for more than approximately 3% of revenues for the years ended December 31, 2021, 2020, and 2019. No individual customer comprised more than approximately 4% and 2% of accounts receivable as of December 31, 2021 and 2020, respectively.

6. Revenues:

Disaggregated revenues by type of service and by country are provided below for the years ended December 31, 2021, 2020, and 2019. No individual country outside of the U.S. accounted for more than 10.0% of our consolidated revenues for the years ended December 31, 2021, 2020, or 2019.

	*2021*		*2020*		*2019*
Insurance:
Underwriting & rating	$	1,555.1	$	1,413.0	$	1,274.5
Claims		651.8		595.7		610.9
Total Insurance		2,206.9		2,008.7		1,885.4
Energy and Specialized Markets		648.9		619.2		543.7
Financial Services		142.8		156.7		178.0
Total revenues	$	2,998.6	$	2,784.6	$	2,607.1

	*2021*		*2020*		*2019*
Revenues:
United States	$	2,285.5	$	2,133.6	$	2,005.6
United Kingdom		204.4		181.6		177.3
Other countries		508.7		469.4		424.2
Total revenues	$	2,998.6	$	2,784.6	$	2,607.1

Contract assets are defined as an entity's right to consideration in exchange for goods or services that the entity has transferred to a customer when that right is conditioned on something other than the passage of time. As of December 31, 2021 and 2020, we had no contract assets.

VERISK ANALYTICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Contract liabilities are defined as an entity's obligation to transfer goods or services to a customer for which the entity has received consideration (or an amount of consideration is due) from the customer. As of December 31, 2021 and 2020, we had contract liabilities that primarily related to unsatisfied performance obligations to provide customers with the right to use and update the online content over the remaining contract term of $504.8 million and $468.2 million, respectively. Contract liabilities, which are current and noncurrent, are included in "Deferred revenues" and "Other noncurrent liabilities" in our consolidated balance sheets, respectively, as of December 31, 2021 and 2020.

The following is a summary of the change in contract liabilities from December 31, 2019 through December 31, 2021:

Contract Liabilities at December 31, 2019	$	443.2
Revenue		(2,784.6	)
Billings		2,809.6
Contract Liabilities at December 31, 2020		468.2
Revenue		(2,998.6	)
Billings		3,035.2
Contract Liabilities at December 31, 2021	$	504.8

Our most significant remaining performance obligations relate to providing customers with the right to use and update the online content over the remaining contract term. Our disclosure of the timing for satisfying the performance obligation is based on the requirements of contracts with customers. However, from time to time, these contracts may be subject to modifications, impacting the timing of satisfying the performance obligations. These performance obligations, which are expected to be satisfied within one year, comprised approximately 97% and 99% of the balance as of December 31, 2021 and 2020, respectively.

We recognize an asset for incremental costs of obtaining a contract with a customer if we expect the benefits of those costs to be longer than one year. As of December 31, 2021 and 2020, we had deferred commissions of $86.8 million and $73.8 million, respectively, which have been included in "Prepaid expenses" and "Other noncurrent assets" in our accompanying consolidated balance sheets.

7. Fair Value Measurements:

Certain assets and liabilities are reported at fair value in our accompanying consolidated balance sheets. Such assets and liabilities include amounts for both financial and non-financial instruments. To increase consistency and comparability of assets and liabilities recorded at fair value, ASC 820-10 established a three-level fair value hierarchy to prioritize the inputs to valuation techniques used to measure fair value. ASC 820-10 requires disclosures detailing the extent to which companies' measure assets and liabilities at fair value, the methods and assumptions used to measure fair value, and the effect of fair value measurements on earnings. In accordance with ASC 820-10, we applied the following fair value hierarchy:

Level 1 — Assets or liabilities for which the identical item is traded on an active exchange, such as publicly-traded instruments.

Level 2 — Assets and liabilities valued based on observable market data for similar instruments.

Level 3 — Assets or liabilities for which significant valuation assumptions are not readily observable in the market; instruments valued based on the best available data, some of which is internally-developed, and considers risk premiums that a market participant would require.

The fair value of cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities, and short-term debt approximate their carrying amounts because of the short-term nature of these instruments. Our investments in registered investment companies, which are Level 1 assets measured at fair value on a recurring basis using quoted prices in active markets multiplied by the number of shares owned, were $5.0 million and $4.1 million as of December 31, 2021 and 2020, respectively. Our investments in registered investment companies have been included in "Other current assets" in our consolidated balance sheets as of December 31, 2021 and 2020.

We elected not to carry our long-term debt at fair value. The carrying value of our long-term debt represents the amortized cost, inclusive of unamortized premium, and net of unamortized discount and debt issuance costs. We assess the fair value of these financial instruments based on an estimate of interest rates available to us for financial instruments with similar features, our current credit rating, and spreads applicable to us. The following table summarizes the carrying value and estimated fair value of these financial instruments as of December 31, 2021 and 2020, respectively:

		2021				2020
	*Fair Value*	*Carrying*		*Estimated*		*Carrying*		*Estimated*
	*Hierarchy*	*Value*		*Fair Value*		*Value*		*Fair Value*
Financial instrument not carried at fair value:
Senior Notes (Note 15)	Level 2	$	2,692.0	$	3,017.4	$	3,140.8	$	3,652.2

On February 1, 2020, the sale of the aerial imagery sourcing group was completed. We contributed the assets related to the disposed business and cash of $63.8 million in exchange for a non-controlling 35.0% ownership interest in a nonpublic company, Vexcel Group, Inc. ("Vexcel"). On May 25, 2021, we made an additional $15.0 million cash investment in Vexcel for an additional 3.7% ownership. As of December 31, 2021 and 2020, we had an investment of $144.1 million and $129.1 million, respectively, related to such interest. The value of our investment is based on management's estimates with the assistance of valuations performed by third-party specialists. This investment was included in "Other noncurrent assets" in our accompanying consolidated balance sheets. Refer to Note 11. Dispositions for further discussion.

As of December 31, 2021 and 2020, we had securities without readily determinable market values, inclusive of Vexcel, of $161.6 million and $143.1 million, respectively, which were accounted for at cost. We do not have the ability to exercise significant influence over the investees’ operating and financial policies or do not hold investments in common stock or in-substance common stock in such entities. As of December 31, 2021 and 2020, we also had investments in private companies of $54.6 million and $49.5 million, respectively, accounted for in accordance with ASC 323-10-25, The Equity Method of Accounting for Investments in Common Stock ("ASC 323-10-25") as equity method investments. All such investments were included in "Other noncurrent assets" in our accompanying consolidated balance sheets. For the years ended December 31, 2021 and 2020, there was no provision for credit losses related to these investments.

VERISK ANALYTICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

8. Leases:

We have operating and finance leases for corporate offices, data centers, and certain equipment that are accounted for under ASC 842. The lease term for our corporate headquarters ends in 2033 and includes the options to extend for one 10-year renewal period and two 5-year renewal periods. The lease of our Hyderabad, India office may be terminated in six months without penalty. Extension and termination options are considered in the calculation of our right-of-use ("ROU") assets and lease liabilities when we determine it is reasonably certain that we will exercise those options.

The following table presents lease cost and cash paid for amounts included in the measurement of lease liabilities for finance and operating leases for the years ended December 31, 2021 and 2020:

	*2021*			*2020*
Lease cost:
Operating lease cost (1)	$	52.5		$	52.2
Sublease income		(1.7	)		(0.3	)
Finance lease cost
Depreciation of finance lease assets (2)		13.9			13.4
Interest on finance lease liabilities (3)		0.8			0.7
Total lease cost	$	65.5		$	66.0

Other information:
Cash paid for amounts included in the measurement of lease liabilities
Operating cash outflows from operating leases	$	(51.3	)	$	(52.0	)
Operating cash outflows from finance leases	$	(0.8	)	$	(0.7	)
Financing cash outflows from finance leases	$	(18.2	)	$	(14.4	)

(1) Included in "Cost of revenues" and "Selling, general and, administrative" expenses in our accompanying consolidated statements of operations

(2) Included in "Depreciation and amortization of fixed assets" in our accompanying consolidated statements of operations

(3) Included in "Interest expense" in our accompanying consolidated statements of operations

The following table presents weighted-average remaining lease terms and weighted-average discount rates for finance and operating leases for the years ended December 31, 2021 and 2020:


Weighted-average remaining lease term - operating leases (in years)	8.5		9.3
Weighted-average remaining lease term - finance leases (in years)	1.6		2.2
Weighted-average discount rate - operating leases	3.8	%	3.9	%
Weighted-average discount rate - finance leases	3.8	%	4.1	%

Our ROU assets and lease liabilities for finance leases were $19.0 million and $13.5 million, respectively, as of December 31, 2021. Our ROU assets and lease liabilities for finance leases were $27.1 million and $24.7 million, respectively, as of December 31, 2020. Our ROU assets for finance leases were included in "Fixed assets, net" in our accompanying consolidated balance sheets. Our lease liabilities for finance leases were included in the "Short-term debt and current portion of long-term debt" and "Long-term debt" in our accompanying consolidated balance sheets (See Note 15. Debt).

Maturities of lease liabilities for the years through 2027 and thereafter are as follows:

Years Ending	*Operating Leases*			*Finance Leases*
2022	$	51.5		$	13.0
2023		48.9			1.3
2024		40.0			0.4
2025		35.4			0.1
2026		30.3			—
2027 and thereafter		145.8			—
Total lease payments		351.9			14.8
Less: Amount representing interest		(56.0	)		(1.5	)
Present value of total lease payments	$	295.9		$	13.3

VERISK ANALYTICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

9. Fixed Assets

The following is a summary of fixed assets:

	*Useful Life (in years)*	*Cost*		*Accumulated Depreciation and Amortization*			*Net*
December 31, 2021
Furniture and office equipment	3 - 10	$	259.2	$	(219.6	)	$	39.6
Leasehold improvements	Lease term		135.7		(54.5	)		81.2
Purchased software	3		92.1		(71.1	)		21.0
Software development costs	3 - 7		1,077.4		(584.5	)		492.9
Leased equipment	3 - 4		60.5		(41.5	)		19.0
Motor vehicles and field equipment	2 - 10		6.2		(1.7	)		4.5
Total fixed assets		$	1,631.1	$	(972.9	)	$	658.2
December 31, 2020
Furniture and office equipment	3 - 10	$	273.6	$	(215.8	)	$	57.8
Leasehold improvements	Lease term		118.3		(44.7	)		73.6
Purchased software	3		77.7		(68.6	)		9.1
Software development costs	3 - 7		924.6		(465.3	)		459.3
Leased equipment	3 - 4		68.3		(41.2	)		27.1
Motor vehicles and field equipment	2 - 10		6.8		(1.4	)		5.4
Total fixed assets		$	1,469.3	$	(837.0	)	$	632.3

Depreciation and amortization of fixed assets for the years ended December 31, 2021, 2020, and 2019 were $206.9 million, $192.2 million, and $185.7 million, of which $137.5 million, $120.6 million, and $100.2 million related to amortization of internal-use software development costs, respectively. Amortization expense related to development of software for sale in accordance with ASC 985-20 was $11.7 million, $11.3 million, and $12.8 million for the years ended December 31, 2021, 2020, and 2019, respectively. We had unamortized software development costs that had been capitalized in accordance with ASC 350-40 of $433.5 million and $405.8 million as of December 31, 2021 and 2020, respectively. We had unamortized software development costs that had been capitalized in accordance with ASC 985-20 of $59.4 million and $53.5 million as of December 31, 2021 and 2020, respectively. Leased assets include amounts held under finance leases for automobiles, computer software, and computer equipment.

As of December 31, 2021, we reassessed the recoverability of long-lived assets for our Financial Services reporting unit based upon the weaker than expected operating performance as a result of changing market conditions. These conditions constituted a triggering event, which resulted in a $134.0 million impairment to the long-lived assets in our Financial Services operating segment including $45.8 million to software development costs in fixed assets. We based our analysis of the fair value of our long-lived assets on the indication of fair value provided by the offer to purchase such reporting unit, which was approved by our Board of Directors of February 16, 2022. This impairment is included within "Other operating loss (income)" in our accompanying consolidated statement of operations.

VERISK ANALYTICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

10. Acquisitions

2021 Acquisitions

On December 23, 2021, we acquired approximately 96.7 percent of the stock of ACTINEO GmbH ("ACTINEO") with an option to acquire the remaining shares at a future date, for a net cash purchase price of $148.9 million. ACTINEO offers a comprehensive portfolio of services, technology and data solutions to support the entire bodily injury settlement process. With this acquisition, we add ACTINEO's established claims management solutions to our leading data analytics and insurance ecosystem, providing customers with digitalization and medical expertise solutions throughout the entire claims process. ACTINEO is part of the claims vertical within our Insurance segment.

On November 2, 2021, we acquired 100 percent of the stock of Data Driven Safety, LLC ("Data Driven Safety") for a net cash purchase price of $93.5 million, of which $2.0 million represents indemnity escrows. Data Driven Safety, a leading public record data aggregation firm that specializes in driver risk assessment in the U.S., has become a part of the underwriting & rating category within our Insurance segment. We believe that Data Driven Safety will expand our robust auto insurance analytics, providing insurers with information to further refine underwriting, improve the customer experience and promote public safety.

On September 1, 2021, we acquired 100 percent of the stock of Ignite Software Systems Limited ("Ignite") for a net cash purchase price of $13.8 million. Ignite, a provider of insurance policy administration systems to brokers, managing general agents, and insurers, has become a part of the underwriting & rating category within our Insurance segment. We believe that Ignite's client focus and deep domain knowledge will fit into our business model providing new and existing clients with access to a broader expert advice and service.

On June 17, 2021, we acquired 100 percent of the stock of Roskill Holdings Limited ("Roskill") for a net cash purchase price of $22.1 million, of which $4.8 million represents indemnity escrows. Roskill, a provider of metals and materials supply chain intelligence, has become part of our Energy and Specialized Markets segment. Roskill’s capabilities reinforce our ability to provide comprehensive analysis across the energy, and metals and mining value chain while adding analysis, data, and insight on battery raw materials metals.

On March 2, 2021, we acquired a 51.0 percent ownership in Whitespace Software Limited ("Whitespace") for a net cash purchase price of $16.8 million. The remaining 49.0 percent ownership interest in Whitespace will be acquired by us, in three equal proportions over the next three years, at a purchase price determined based upon a fixed revenue multiple and adjusted for any free cash flow shortfall. Whitespace, a provider of digital placing technology to the (re)insurance market, has become part of the underwriting & rating category within our Insurance segment. We expect our investment in Whitespace to enable a seamless real-time quote-to-bind electronic placing and global distribution solution, with straight-through submissions for our customers.

The preliminary purchase price allocation of the 2021 acquisitions resulted in the following:

	*ACTINEO*		*Data Driven Safety*		*Others*		*Total*
Cash and cash equivalents	$	0.2	$	3.4	$	5.7	$	9.3
Accounts receivable		1.8		1.1		2.1		5.0
Other current assets		—		2.0		1.2		3.2
Fixed assets		1.4		—		0.2		1.6
Operating lease right-of-use assets, net		4.2		0.4		0.9		5.5
Intangible assets		48.3		42.1		25.3		115.7
Goodwill		121.9		73.7		61.5		257.1
Other assets		—		—		4.8		4.8
Total assets acquired		177.8		122.7		101.7		402.2
Current liabilities		2.1		3.3		4.0		9.4
Deferred revenues		—		0.4		4.7		5.1
Operating lease liabilities		4.2		0.4		0.9		5.5
Deferred income tax, net		15.8		—		5.2		21.0
Other liabilities		—		21.7		4.8		26.5
Total liabilities assumed		22.1		25.8		19.6		67.5
Net assets acquired		155.7		96.9		82.1		334.7
Less: Noncontrolling interests		6.6		—		19.8		26.4
Less: Cash acquired		0.2		3.4		5.7		9.3
Net cash purchase price	$	148.9	$	93.5	$	56.6		299.0

The preliminary amounts assigned to intangible assets by type for our 2021 acquisitions are summarized in the table below:

	*Weighted Average Useful Life (in years)*	*Total*
Technology-based	5	$	21.2
Marketing-related	4		1.4
Customer-related	13		84.7
Database-based	5		8.4
Total intangible assets		$	115.7

The preliminary allocations of the purchase price for the 2021 acquisitions with less than a year of ownership are subject to revisions as additional information is obtained about the facts and circumstances that existed as of each acquisition date. The revisions may have a significant impact on our consolidated financial statements. The allocations of the purchase price will be finalized once all the information is obtained, but not to exceed one year from the acquisition date. The primary areas of the purchase price allocation that are not yet finalized relate to income and non-income taxes, deferred revenues, the valuation of intangible assets acquired, right-of-use assets and operating lease liabilities and residual goodwill. The goodwill associated with our acquisitions include the acquired assembled work force, the value associated with the opportunity to leverage the work force to continue to develop the technology and content assets, as well as our ability to grow through adding additional customer relationships or new solutions in the future. Of the $257.1 million in goodwill associated with our acquisitions, $182.5 million is not deductible for tax purposes. The preliminary amounts assigned to intangible assets by type for these acquisitions were based upon our valuation model and historical experiences with entities with similar business characteristics.

For the year ended December 31, 2021, we incurred transaction costs related to acquisitions of $2.8 million, which are included within "Selling, general and administrative expenses in the accompanying consolidated statements of operations. Refer to Note 12. Goodwill and Intangible Assets for further discussion.

Our 2021 acquisitions were not significant, both individually and in the aggregate, to our consolidated financial statements for the years ended December 31, 2021, 2020 and 2019, and therefore, supplemental information disclosure on an unaudited pro forma basis is not presented.

VERISK ANALYTICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

2020 Acquisitions

On December 16, 2020, we acquired 100 percent of the stock of Lead Intelligence, Inc. ("Jornaya"), a provider of consumer behavioral data and intelligence, for a net cash purchase price of $124.9 million. The acquisition added Jornaya's proprietary view of consumer buying journeys to our growing set of marketing solutions for the insurance and financial services markets, as well as provide customers with the intelligence and agility to time and tailor interactions based on actual in-market behaviors. Jornaya has become part of the underwriting & rating category within our Insurance segment. The final purchase price allocation of the acquisition is presented in the table below.

On September 9, 2020, we acquired 100 percent of the stock of Franco Signor LLC ("Franco Signor") for a net cash purchase price of $159.7 million, of which $8.0 million represents indemnity escrows. Franco Signor is a Medicare Secondary Payer compliance solutions provider to large employers, insurers and third-party administrators in the U.S. Franco Signor has become part of the claims category within our Insurance segment and enhanced the solutions we currently offer, as well as added professional administrative services for Medicare Set Asides to our suite of solutions. The final purchase price allocation of the acquisition is presented in the table below.

The final purchase price allocations, inclusive of closing adjustments, of our 2020 acquisitions resulted in the following:

	*Lead Intelligence*		*Franco Signor*			*Total*
Cash and cash equivalents (1)	$	5.9	$	10.9		$	16.8
Accounts receivable		2.8		2.2			5.0
Other current assets		1.4		0.9			2.3
Fixed assets		0.8		0.4			1.2
Operating lease right-of-use assets, net		1.6		1.5			3.1
Intangible assets		64.3		59.1			123.4
Goodwill		69.9		101.5			171.4
Other assets		0.1		8.0			8.1
Total assets acquired		146.8		184.5			331.3
Current liabilities (1)		2.1		8.3			10.4
Deferred revenues		2.6		0.3			2.9
Operating lease liabilities		1.6		1.5			3.1
Deferred income tax, net		9.7		1.5			11.2
Other liabilities		—		8.0			8.0
Total liabilities assumed		16.0		19.6			35.6
Net assets acquired		130.8		164.9			295.7
Less: Cash and cash equivalents		5.9		10.9			16.8
Restricted cash (1)		—		(5.7	)		(5.7	)
Cash acquired		5.9		5.2			11.1
Net cash purchase price	$	124.9	$	159.7		$	284.6

(1) Within cash and cash equivalents, there is $5.7 million of restricted cash related to Franco Signor's professional administrative services for Medicare Set Asides, with an offsetting liability of $5.7 million included within current liabilities.

The final amounts assigned to intangible assets by type for our 2020 acquisitions are summarized in the table below:

	*Weighted Average Useful Life (in years)*	*Total*
Technology-based	11	$	30.8
Marketing-related	5		2.1
Customer-related	11		90.5
Total intangible assets		$	123.4

For the year ended December 31, 2021, we finalized the purchase accounting for our 2020 acquisitions during the measurement periods in accordance with ASC 805, Business Combinations. The impact of finalization of the purchase accounting associated with these acquisitions was not material to our accompanying consolidated statements of operations for the years ended December 31, 2020 and 2019.

The goodwill of $90.6 million associated with the purchases of Jornaya and Franco Signor is not deductible for tax purposes. For the year ended December 31, 2020, we incurred transaction costs related to acquisitions of $2.2 million, which are included within "Selling, general and administrative" expenses in our accompanying consolidated statements of operations. Refer to Note 12. Goodwill and Intangible Assets for further discussion.

Our 2020 acquisitions were not significant, both individually and in the aggregate, to our consolidated financial statements for the years ended December 31, 2020 and 2019, and therefore, supplemental information disclosure on an unaudited pro forma basis is not presented.

VERISK ANALYTICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

2019 Acquisitions

On December 23, 2019, we acquired 100 percent of the stock of Flexible Architecture and Simplified Technology, LLC ("FAST"), a software company for the life insurance and annuity industry, for a net cash purchase price of $193.9 million, of which $1.9 million represents indemnity escrows. FAST offers a flexible policy administration system that helps insurers accelerate underwriting and claims to enhance the customer experience and support profitable growth. FAST has become part of the underwriting & rating category within our Insurance segment, and expanded and enhanced the suite of solutions that we are developing across the enterprise for life insurers looking to transform the customer experience throughout the life of the policy, from quote to claims. The final purchase price allocation of the acquisition is presented in the table below.

On December 19, 2019, we acquired selected assets of Commerce Signals, Inc. ("Commerce Signals"), a software company that offers a data sharing platform for retail, restaurant and entertainment marketers, for a net cash purchase price of $3.9 million, which consists of a holdback of $1.1 million as security for the indemnification obligations of the seller. Commerce Signals has become part of our Financial Services segment, and enhanced the existing solutions that we currently offer. The final purchase price allocation of the acquisition is presented as part of "Others" in the table below.

On November 5, 2019, we acquired 100 percent of the stock of Genscape, Inc. (“Genscape”), a global provider of real-time data and intelligence for commodity and energy markets, for a net cash purchase price of $351.0 million. Genscape has become part of the Energy and Specialized Markets segment, and enhanced our existing sector intelligence in energy data and analytics. The final purchase price allocation of the acquisition is presented in the table below.

On October 10, 2019, we acquired 100 percent of the stock of BuildFax, Inc. ("BuildFax") for a net cash purchase price of $40.2 million, which consists a holdback of $1.0 million. BuildFax uses building permit, contractor, and inspection data to provide information about the condition of properties to insurance and financial institutions. The data from BuildFax enhances property analytics under the underwriting & rating category within our Insurance segment while helping underwriters gain insight into changes in the property insured. The final purchase price allocation of the acquisition is presented in the table below.

On August 28, 2019, we acquired substantially all of the assets of Property Pres Wizard, LLC. ("PPW") for a net cash purchase price of $15.0 million, of which $1.5 million represents indemnity escrows. PPW is a web and mobile application that manages work order details and property status in the field services industry throughout the supply chain. PPW has become part of the claims category within our Insurance segment, and added a service order and project management application to our PropTech suite of solutions. The final purchase price allocation of the acquisition is presented as part of "Others" in the table below.

On July 31, 2019, we acquired 100 percent of the stock of Keystone Aerial Surveys, Inc. ("Keystone") for a net cash purchase price of $29.4 million, of which $2.7 million represents indemnity escrows, to expand our remote imagery business. Keystone sourced imagery by providing customers geospatial solutions and had become part of the claims category within our Insurance segment. Keystone was a component within the aerial imagery sourcing group, which was qualified as assets held for sale on December 2, 2019. On February 1, 2020, the sale of the aerial imagery sourcing group was closed. See Note 11 . Dispositions for further discussion. The final purchase price allocation of the acquisition is presented as part of "Others" in the table below.

On March 29, 2019, we entered into an agreement with an enterprise application software provider to acquire their Content as a Service (“CaaS”) business, which included the Environmental Health and Safety Regulatory Content and Environmental Health and Safety Regulatory Documentation teams and data assets, for a net cash purchase price of $65.2 million. The CaaS business has become part of our Energy and Specialized Markets segment. This transaction strengthened our environmental health and safety services business and extended our global customer footprint and European operations. The final purchase price allocation of the acquisition is presented in the table below.

The final purchase price allocations, inclusive of closing adjustments, of our 2019 acquisitions resulted in the following:

	FAST			Genscape			BuildFax			CaaS			Others			Total
Cash and cash equivalents	$	2.9		$	0.2		$	0.4		$	3.7		$	3.1		$	10.3
Accounts receivable		4.7			13.6			1.8			—			3.9			24.0
Other current assets		0.4			1.4			0.1			0.7			0.6			3.2
Fixed assets		1.8			15.9			0.9			0.2			6.3			25.1
Operating lease right-of-use assets, net		1.4			7.4			0.4			—			0.5			9.7
Intangible assets		69.0			153.2			21.9			34.4			14.1			292.6
Goodwill		120.7			241.4			20.2			41.2			28.2			451.7
Other assets		0.1			—			—			0.1			4.4			4.6
Total assets acquired		201.0			433.1			45.7			80.3			61.1			821.2
Current liabilities		2.4			17.4			0.9			1.3			1.3			23.3
Deferred revenues		0.3			27.3			2.4			10.1			—			40.1
Operating lease liabilities		1.4			7.4			0.4			—			0.5			9.7
Deferred income tax, net		—			29.8			0.4			—			2.6			32.8
Other liabilities		—			—			1.0			—			5.3			6.3
Total liabilities assumed		4.1			81.9			5.1			11.4			9.7			112.2
Net assets acquired		196.9			351.2			40.6			68.9			51.4			709.0
Cash acquired		(3.0	)		(0.2	)		(0.4	)		(3.7	)		(3.1	)		(10.4	)
Net cash purchase price	$	193.9		$	351.0		$	40.2		$	65.2		$	48.3		$	698.6

VERISK ANALYTICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The final amounts assigned to intangible assets by type for our 2019 acquisitions are summarized in the table below:

	*Weighted Average Useful Life (in years)*	*Total*
Technology-based	6	$	81.9
Marketing-related	4		3.9
Customer-related	12		185.5
Database-based	10		20.7
Total intangible assets		$	292.0

For the year ended December 31, 2020, we finalized the purchase accounting for our 2019 acquisitions during the measurement periods in accordance with ASC 805, Business Combinations. The impact of finalization of the purchase accounting associated with these acquisitions was not material to our accompanying consolidated statements of operations for the years ended December 31, 2019 and 2018.

The goodwill of $307.1 million associated with the purchases of FAST, Commerce Signals, Genscape, BuildFax, PPW, Keystone, and CaaS is not deductible for tax purposes. For the year ended December 31, 2019, we incurred transaction costs related to acquisitions of $3.0 million, which are included within "Selling, general and administrative" expenses in our accompanying consolidated statements of operations. Refer to Note 12. Goodwill and Intangible Assets for further discussion.

Our 2019 acquisitions were not significant, both individually and in the aggregate, to our consolidated financial statements for the year ended December 31, 2019 and therefore, supplemental information disclosure on an unaudited pro forma basis is not presented.

Acquisition Escrows and Related Liabilities

Pursuant to the related acquisition agreements, we have funded various escrow accounts to satisfy pre-acquisition indemnity and tax claims arising subsequent to the acquisition dates, as well as a portion of the contingent payment. During the years ended December 31, 2021 and 2020, we released $12.1 million and $0.8 million of indemnity escrows related to various acquisitions. At December 31, 2021 and 2020, the current portion of the escrows amounted to $10.6 million and $1.5 million, and the noncurrent portion of the escrows amounted to $4.7 million and $18.5 million, respectively. The current and noncurrent portions of the escrows have been included in "Other current assets" and "Other noncurrent assets" in our accompanying consolidated balance sheets, respectively.

The acquisitions of Arium Limited, Rebmark Legal Solutions Limited, ACTINEO GmbH, and Data Driven Safety, LLC included acquisition-related contingent payments, for which the sellers of these acquisitions could receive additional payments by achieving the specific predetermined revenue, EBITDA, and EBITDA margin earn-out targets for exceptional performance. We believe that the liabilities recorded as of December 31, 2021 and 2020 reflect the best estimate of acquisition-related contingent payments. The associated current portion of contingent payments were $0.5 million and $0.6 million as of December 31, 2021 and 2020, respectively. The associated noncurrent portion of contingent payments were $21.7 million and $0.2 million as of December 31, 2021 and 2020, respectively.

VERISK ANALYTICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

11. Dispositions:

On February 1, 2020, the sale of the aerial imagery sourcing group was completed. We contributed assets related to the disposed business, including cash of $63.8 million, in exchange for a noncontrolling 35.0% ownership interest in a nonpublic company, Vexcel. We determined the fair value of the securities associated with the noncontrolling ownership interest in Vexcel with the assistance of valuations performed by third-party specialists, including the discounted cash flow analysis and estimates made by management. The securities were concluded not to have a readily determinable fair value and did not qualify for the practical expedient to estimate fair value. The contributed assets approximated the fair value of the equity securities related to the noncontrolling ownership interest; therefore, there was no gain or loss recorded in conjunction with this disposition for the year ended December 31, 2020.

On February 14, 2020, the sale of the compliance background screening business was completed for net cash proceeds of $23.1 million. A gain of $15.9 million was included in "Other operating loss (income)" within our accompanying consolidated statements of operations for the year ended December 31, 2020.

On March 1, 2020, the sale of the data warehouse business within the Financial Services segment was completed. We recorded a gain of $3.5 million in "Other operating loss (income)" within our accompanying consolidated statements of operations for the year ended December 31, 2020.

VERISK ANALYTICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

12. Goodwill and Intangible Assets:

We completed the required annual impairment test as of June 30, 2021, 2020 and 2019, which resulted in no impairment of goodwill. Based on the results of our impairment assessment as of June 30, 2021, we determined that the fair value of each of our reporting units exceeded their respective carrying value. As of December 31, 2021, we reassessed the recoverability of the long-lived assets for our Financial Services reporting unit based upon the weaker than expected operating performance as a result of changing market conditions. These conditions constituted a triggering event, which resulted in a $134.0 million impairment to the long-lived assets for our Financial Services reporting unit including $88.2 million to intangible assets and $45.8 million to fixed assets. We based our analysis of the fair value of our long-lived assets on the indication of fair value provided by the offer to purchase such reporting unit, which was approved by our Board of Directors on February 16, 2022. This impairment is included within "Other operating loss (income)" in our consolidated statement of operations.

The following is a summary of the change in goodwill from December 31, 2019 through December 31, 2021, both in total and as allocated to our operating segments:

	*Insurance*			*Energy and Specialized Markets*			*Financial Services*			*Total*
Goodwill at December 31, 2019	$	998.8		$	2,389.5		$	476.0		$	3,864.3
Acquisitions		171.7			—			—			171.7
Purchase accounting reclassifications		2.1			(6.0	)		(0.2	)		(4.1	)
Current period adjustment		21.4			(19.5	)		—			1.9
Foreign currency translation adjustment		14.6			59.6			0.1			74.3
Goodwill at December 31, 2020		1,208.6			2,423.6			475.9			4,108.1
Acquisitions and purchases of controlling interests		235.9			21.2			—			257.1
Purchase accounting reclassifications		(0.3	)		—			—			(0.3	)
Current period adjustment (1)		15.8			(15.8	)		—			—
Foreign currency translation adjustment		(5.2	)		(28.0	)		(0.5	)		(33.7	)
Goodwill at December 31, 2021	$	1,454.8		$	2,401.0		$	475.4		$	4,331.2

(1) This adjustment relates to a segment reclassification; refer to Note 19. Segment Reporting

Our intangible assets and related accumulated amortization consisted of the following:

	*Weighted*
	*Average*
	*Useful Life*			*Accumulated*
	*(in years)*	*Cost*		*Amortization*			*Net*
December 31, 2021
Technology-based	7	$	576.4		(403.3	)	$	173.1
Marketing-related	15		274.1		(129.6	)	$	144.5
Contract-based	6		5.0		(5.0	)	$	—
Customer-related	13		1,015.4		(426.5	)	$	588.9
Database-based	18		484.2		(164.8	)	$	319.4
Total intangible assets		$	2,355.1	$	(1,129.2	)	$	1,225.9
December 31, 2020
Technology-based	7	$	559.6	$	(349.5	)	$	210.1
Marketing-related	16		275.2		(113.4	)		161.8
Contract-based	6		5.0		(5.0	)		—
Customer-related	13		1,004.3		(354.2	)		650.1
Database-based	19		501.0		(138.2	)		362.8
Total intangible assets		$	2,345.1	$	(960.3	)	$	1,384.8

Amortization expense related to intangible assets for the years ended December 31, 2021, 2020, and 2019, was $176.7 million, $165.9 million, and $138.0 million, respectively. Estimated amortization expense in future periods through 2027 and thereafter for intangible assets subject to amortization is as follows:

Years Ending	*Amount*
2022	$	170.6
2023		155.8
2024		133.8
2025		109.3
2026		104.6
2027 and thereafter		551.8
Total	$	1,225.9

VERISK ANALYTICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

13. Income Taxes:

Domestic and foreign income before income taxes was as follows:

	*2021*		*2020*		*2019*
U.S.	$	805.3	$	834.0	$	553.9
Foreign		70.1		63.5		14.5
Total income before income taxes	$	875.4	$	897.5	$	568.4

The components of the provision for income taxes for the years ended December 31 were as follows:

	*2021*		*2020*		*2019*
Current:
Federal	$	116.8	$	111.0	$	109.9
State and local		21.1		23.1		21.4
Foreign		21.4		18.9		14.6
Total current provision for income taxes		159.3		153.0		145.9
Deferred:
Federal		19.8		22.6		(14.3	)
State and local		11.8		7.4		(0.2	)
Foreign		18.2		1.8		(12.9	)
Total deferred provision for income taxes		49.8		31.8		(27.4	)
Provision for income taxes	$	209.1	$	184.8	$	118.5

The reconciliation between our effective tax rate and the statutory tax rate is as follows for the years ended December 31:


Federal statutory rate	21.0	%	21.0	%	21.0	%
State and local taxes, net of federal tax benefit	2.8	%	2.7	%	2.8	%
U.K. legislative rate change impact	3.8	%	1.5	%	—	%
Foreign Derived Intangible Income (FDII)	(0.9	)%	(0.8	)%	(1.2	)%
Global Intangible Low-taxed Income (GILTI)	1.5	%	—	%	—	%
Stock-based compensation	(3.3	)%	(3.7	)%	(3.0	)%
Earn-outs	—	%	—	%	2.0	%
Other	(1.0	)%	(0.1	)%	(0.7	)%
Effective tax rate	23.9	%	20.6	%	20.9	%

The increase in the effective tax rate in 2021 compared to 2020 was primarily due to the deferred tax impact of the tax rate increase in the United Kingdom that was enacted and recorded in 2021, the impact of the current year Global Intangible Low-taxed income inclusion ("GILTI"), and the impact of higher tax benefits from equity compensation in the prior period versus the current period. The company's accounting policy for GILTI is to treat these inclusions in taxable income as a current period expense when incurred.

The tax effects of significant items comprising our deferred tax assets as of December 31 are as follows:

	*2021*			*2020*
Deferred tax assets:
Employee wages and other benefits	$	49.0		$	56.7
ASC 842/Deferred rent		10.5			10.3
Net operating loss carryover		18.0			22.7
Litigation accrual		—			31.3
Capital and other unrealized losses		1.5			1.6
Interest expense		58.7			44.1
Other		7.4			12.2
Total		145.1			178.9
Less valuation allowance		(64.1	)		(48.0	)
Deferred tax assets		81.0			130.9
Deferred tax liabilities:
Fixed assets and intangible assets		(461.6	)		(445.3	)
Commissions		(20.2	)		(16.6	)
Pensions		(54.1	)		(49.4	)
Other		(9.0	)		(7.4	)
Deferred tax liabilities		(544.9	)		(518.7	)
Deferred tax liabilities, net	$	(463.9	)	$	(387.8	)

The net deferred tax liabilities of $463.9 million consist primarily of timing differences involving amortization.

VERISK ANALYTICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The ultimate realization of the deferred tax assets depends on our ability to generate sufficient taxable income in the future. We have provided a valuation allowance against the deferred tax assets associated with the interest expense deduction limitation in the U.K. We have also provided for a valuation allowance against the deferred tax assets associated with the net operating losses of certain subsidiaries. Our net operating loss carryforwards expire as follows:

Years Ending	*Amount*
2022 - 2029	$	21.9
2030 - 2034		20.5
2035 - 2041		112.2
Total	$	154.6

A valuation allowance has been established based on our evaluation of the likelihood of utilizing these benefits before they expire. We have determined that the generation of future taxable income from certain subsidiaries to fully realize the deferred tax assets is uncertain. Other than these items, we have determined, based on our historical operating performance, that our taxable income will more likely than not be sufficient to fully realize the deferred tax assets.

As of December 31, 2021, we have not made a provision for U.S. or additional foreign withholdings taxes for any additional outside basis difference inherent in our foreign subsidiaries, as these amounts continue to be indefinitely reinvested in foreign operations. Determining the amount of unrecognized deferred tax liability related to any additional outside basis difference in these entities is not practicable. We do not rely on these unremitted earnings as a source of funds for our domestic business as we expect to have sufficient cash flow in the U.S. to fund our U.S. operational and strategic needs.

We follow ASC No. 740-10 which prescribes a comprehensive model for the financial statement recognition, measurement, presentation, and disclosure of uncertain tax positions taken or expected to be taken in income tax returns. For each tax position, we must determine whether it is more likely than not that the position will be sustained upon examination based on the technical merits of the position, including resolution of any related appeals or litigation. A tax position that meets the more likely than not recognition threshold is then measured to determine the amount of benefit to recognize within the financial statements. No benefits may be recognized for tax positions that do not meet the more likely than not threshold. A reconciliation of the beginning and ending amount of unrecognized tax benefit is as follows:

	*2021*			*2020*			*2019*
Unrecognized tax benefit as of January 1	$	9.9		$	11.5		$	17.4
Gross increase in tax positions in prior period		1.3			0.5			0.6
Gross decrease in tax positions in prior period		(0.1	)		(0.2	)		(3.3	)
Settlements		—			—			(2.4	)
Lapse of statute of limitations		(7.7	)		(1.9	)		(0.8	)
Unrecognized tax benefit as of December 31	$	3.4		$	9.9		$	11.5

Of the total unrecognized tax benefits as of December 31, 2021, 2020, and 2019, $3.4 million, $8.1 million, and $8.6 million, respectively, represent the amounts that, if recognized, would have a favorable effect on our effective tax rate in any future periods.

The total gross amount of accrued interest and penalties for the years ended December 31, 2021, 2020, and 2019 was $0.5 million, $3.9 million, and $4.6 million, respectively. Our practice is to recognize interest and penalties associated with income taxes as a component of “Provision for income taxes” in our accompanying consolidated statements of operations.

We do not expect a significant increase in unrecognized benefits related to federal, state, or foreign tax exposures within the coming year. In addition, we believe that it is reasonably possible that approximately $0.6 million of our currently remaining unrecognized tax positions, each of which is individually insignificant, may be recognized by the end of 2021 as a result of a combination of audit settlements and lapses of statute of limitations, net of additional uncertain tax positions.

We are subject to tax in the U.S., various state, and foreign jurisdictions. Joined by our domestic subsidiaries, we file a consolidated income tax return. With a few exceptions, none of which are material to our consolidated financial statements as of December 31, 2021, we are no longer subject to U.S. federal, state and local, or non-US income tax examinations by tax authorities for tax years before 2017. In New Jersey, we are being audited for the years ended December 31, 2013 through 2018 with a statute extension until September 30, 2022. In Pennsylvania, we are being audited for the years ended December 31, 2018 through 2020 with a statute extension until April 30, 2023. We do not expect that the results of these examinations will have a material effect on our financial position, results of operations, or cash flow.

VERISK ANALYTICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

14. Composition of Certain Financial Statement Caption:

The following table presents the components of “Accounts payable and accrued liabilities” as of December 31:

	*2021*		*2020*
Accounts payable and accrued liabilities:
Accrued salaries, benefits and other related costs	$	169.5	$	158.7
Legal accrual (1)		6.5		126.5
Escrow liabilities		10.6		1.5
Accrued interest	16.3			20.7
Trade accounts payable and other accrued expenses		117.3		99.3
Acquisition-related liabilities		0.5		0.6
Total accounts payable and accrued liabilities	$	320.7	$	407.3

(1)	Included a litigation reserve for Xactware Solutions, Inc. Patent Litigation of $125.0 million in 2020

The following table presents the components of "Other noncurrent assets" as of December 31:

	*2021*		*2020*
Other noncurrent assets:
Pension benefits	$	130.5	$	77.3
Other assets - prepaid expenses		73.0		70.6
Acquisition related escrows		4.7		18.5
Investments in nonpublic companies		216.2		192.6
Deposits and other		6.1		6.7
Total other noncurrent assets	$	430.5	$	365.7

VERISK ANALYTICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

15. Debt:

The following table presents short-term and long-term debt by issuance as of December 31:

	*Issuance*	*Maturity*
	*Date*	*Date*	*2021*			*2020*
Short-term debt and current portion of long-term debt:
Syndicated revolving credit facility	Various	Various	$	610.0		$	50.0
Senior notes:
4.125% senior notes, less unamortized discount and debt issuance costs of $(0.4)	9/12/2012	9/12/2022		349.6			—
5.800% senior notes, less unamortized discount and debt issuance costs of $0.1	4/6/2011	5/1/2021		—			449.9
Finance lease liabilities (1)	Various	Various		11.7			14.4
Short-term debt and current portion of long-term debt				971.3			514.3
Long-term debt:
Senior notes:
3.625% senior notes, less unamortized discount and debt issuance costs of $(10.3) and $(10.7), respectively	5/13/2020	5/15/2050		489.7			489.3
4.125% senior notes, inclusive of unamortized premium, and net of unamortized discount and debt issuance costs of $10.9 and $12.4, respectively	3/6/2019	3/15/2029		610.9			612.4
4.000% senior notes, less unamortized discount and debt issuance costs of $(4.1) and $(5.4), respectively	5/15/2015	6/15/2025		895.9			894.6
5.500% senior notes, less unamortized discount and debt issuance costs of $(4.1) and $(4.3), respectively	5/15/2015	6/15/2045		345.9			345.7
4.125% senior notes, less unamortized discount and debt issuance costs of $(1.1)	9/12/2012	9/12/2022		—			348.9
Finance lease liabilities (1)	Various	Various		1.6			10.3
Syndicated revolving credit facility debt issuance costs	Various	Various		(1.2	)		(1.6	)
Long-term debt				2,342.8			2,699.6
Total debt			$	3,314.1		$	3,213.9

(1) Refer to Note 8. Leases

Accrued interest associated with our outstanding debt obligations was $16.3 million and $20.7 million as of December 31, 2021 and 2020, respectively, and included in “Accounts payable and accrued liabilities” within our accompanying consolidated balance sheets. Interest expense associated with our finance lease and outstanding debt obligations, including amortization of debt issuance costs and original discounts, was $127.0 million, $138.3 million, and $125.7 million for the years ended December 31, 2021, 2020, and 2019, respectively.

Senior Notes

As of December 31, 2021 and December 31, 2020, we had senior notes with an aggregate principal amount of $2,700.0 million and $3,150.0 million outstanding, respectively, and were in compliance with our financial and other debt covenants. On May 3, 2021, we repaid the 5.800% senior notes in full in the amount of $450.0 million utilizing a combination of $250.0 million in borrowings from the credit facility and cash from operations.

VERISK ANALYTICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Syndicated Revolving Credit Facility

We have a Credit Facility with a borrowing capacity of $1,000.0 million with Bank of America N.A., HSBC Bank USA, N.A., JP Morgan Chase Bank, N.A., Wells Fargo Bank, National Association, Citibank, N.A., Credit Suisse AG, Cayman Islands Branch, Morgan Stanley Bank, N.A., First Commercial Bank, Ltd., Los Angeles Branch, TD Bank, N.A., and the Northern Trust Company. Interest on borrowings under the Credit Facility is payable at an interest rate of the administrative agent's prime rate plus 1.0% to 1.625%, depending upon the public debt rating. A commitment fee on any unused balance is payable periodically and may range from 8.0 to 20.0 basis points based upon the public debt rating. The Credit Facility also contains certain financial and other covenants that, among other things, impose certain restrictions on indebtedness, liens, investments, and capital expenditures. These covenants place restrictions on mergers, asset sales, sale/leaseback transactions, and certain transactions with affiliates. The financial covenants require that, at the end of any fiscal quarter, we have a consolidated funded debt leverage ratio of less than 3.5 to 1.0. At our election, the maximum consolidated funded debt leverage ratio could be permitted to increase one time each to 4.0 to 1.0 and 4.25 to 1.0. The Credit Facility may be used for general corporate purposes, including working capital needs and capital expenditures, acquisitions, dividends, and the share repurchase program (the "Repurchase Program"). As of December 31, 2021, we were in compliance with all financial and other debt covenants under the Credit Facility. As of December 31, 2021 and 2020, the available capacity under the Credit Facility was $384.9 million and $944.6 million, net of the letters of credit of $5.1 million and $5.4 million, respectively. Subsequent to December 31, 2021 we have made repayments of $130.0 million under the Credit Facility resulting in $480.0 million in borrowings under the Revolving Credit Facility.

Debt Maturities

The following table reflects our debt maturities:

Years Ending	*Amount*
2022	$	971.7
2023		1.3
2024		0.4
2025		900.1
2026		—
2027 and thereafter		1,450.0
Total	$	3,323.5

VERISK ANALYTICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

16. Stockholders’ Equity:

We have 2,000,000,000 shares of authorized common stock as of December 31, 2021 and 2020. The common shares have rights to any dividend declared by our Board of Directors, subject to any preferential or other rights of any outstanding preferred stock, and voting rights to elect all eleven members of our Board of Directors. At December 31, 2021, 2020, and 2019, the adjusted closing price of our common stock was $228.73, $206.34, and $147.50 per share, respectively.

We have 80,000,000 shares of authorized preferred stock, par value $0.001 per share. The preferred shares have preferential rights over the common shares with respect to dividends and net distribution upon liquidation. We did not issue any preferred shares as of December 31, 2021 and 2020.

On February 17, 2021, April 28, 2021, July 28, 2021, and October 27, 2021, our board approved a cash dividend of $0.29 per share of common stock issued and outstanding to the holders of record as of March 15, 2021, June 15, 2021, September 15, 2021, and December 15, 2021, respectively. Cash dividends of $188.2 million and $175.8 million were paid during the years ended December 31, 2021 and 2020 and recorded as a reduction to retained earnings, respectively.

Share Repurchase Program

We have authorized repurchases of up to $4,600.0 million of our common stock through our Repurchase Program, inclusive of the $500.0 million authorization approved by our board on August 17, 2021. Since the introduction of share repurchase as a feature of our capital management strategies in 2010, we have repurchased shares with an aggregate value of $3,996.2 million. As of December 31, 2021, we had $603.8 million available to repurchase shares. We have no obligation to repurchase stock under this program and intend to use this authorization as a means of offsetting dilution from the issuance of shares under our 2021 Equity Incentive Plan (the "2021 Incentive Plan), our 2013 Equity Incentive Plan (the "2013 Incentive Plan"), our 2009 Equity Incentive Plan (the “2009 Incentive Plan”), our sharesave plan (“U.K. Sharesave Plan”), and our employee stock purchase plan ("ESPP") while providing flexibility to repurchase additional shares if warranted. This authorization has no expiration date and may be increased, reduced, suspended, or terminated at any time. Shares that are repurchased under the Repurchase Program will be recorded as treasury stock and will be available for future issuance.

In December 2020, March 2021, June 2021, and September 2021, we entered into Accelerated Share Repurchase ("ASR") agreements to repurchase shares of our common stock for an aggregate purchase price of $50.0 million, $125.0 million, $150.0 million, and $75.0 million, respectively, with HSBC Bank USA, Citibank, N.A., and Wells Fargo Bank. The ASR agreements are each accounted for as a treasury stock transaction and a forward stock purchase agreement indexed to our common stock. The forward stock purchase agreements are each classified as an equity instrument under ASC 815-40, Contracts in Entity's Own Equity ("ASC 815-40") and were deemed to have a fair value of zero at the respective effective date. Upon payments of the aggregate purchase price on January 4, 2021, April 1, 2021, July 1, 2021, and October 1, 2021, we received an aggregate delivery of 192,687, 565,963, 686,813, and 299,596 shares of our common stock, respectively. Upon the final settlement of the ASR agreements in February 2021, May 2021, September 2021, and December 2021, we received additional shares of 70,787, 121,965, 111,429, and 52,815 as determined by the volume weighted average share price of our common stock of $189.77, $181.71, $187.91, and $212.82 during the term of the ASR agreements, respectively. The aggregate purchase price was recorded as a reduction to stockholders' equity in our consolidated statements of changes in stockholders' equity for the year ended December 31, 2021. These repurchases of 2,102,055 shares for the year ended December 31, 2021 resulted in a reduction of outstanding shares used to calculate the weighted average common shares outstanding for basic and diluted earnings per share ("EPS").

During the years ended December 31, 2021 and 2020, we repurchased 2,545,191 and 2,155,084 shares of common stock as part of the Repurchase Program, inclusive of the ASRs, at a weighted average price of $186.63 and $161.84 per share, respectively. We utilized cash from operations and borrowings from our Credit Facility to fund these repurchases.

Treasury Stock

As of December 31, 2021, our treasury stock consisted of 382,351,399 shares of common stock. During the years ended December 31, 2021, 2020, and 2019, we transferred 1,379,304, 1,811,046, and 1,369,305 shares of common stock, under the 2021 Incentive Plan, 2013 Incentive Plan, and 2009 Incentive Plan, from the treasury shares at a weighted average price of $11.78, $10.67, and $9.72 per share, respectively.

VERISK ANALYTICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Earnings Per Share

The following is a reconciliation of the numerators and denominators of our basic and diluted EPS computations for the years ended December 31:

	*2021*		*2020*		*2019*
	(In millions, except for share and per share data)
Numerator used in basic and diluted EPS:
Net income attributable to Verisk	$	666.2	$	712.7	$	449.9
Denominator:
Weighted average number of common shares used in basic EPS		161,841,441		162,610,586		163,535,438
Effect of dilutive shares:
Potential common shares issuable from stock options and stock-based awards		1,497,468		2,710,123		3,024,677
Weighted average number of common shares and dilutive potential common shares used in diluted EPS		163,338,909		165,320,709		166,560,115

The potential shares of common stock that were excluded from diluted EPS were 620,241, 513,137, and 674,983 at December 31, 2021, 2020, and 2019, respectively, because the effect of including those potential shares was anti-dilutive.

Accumulated Other Comprehensive Losses

The following is a summary of accumulated other comprehensive losses as of December 31:

	*2021*			*2020*
Foreign currency translation adjustment	$	(338.0	)	$	(292.2	)
Pension and postretirement adjustment, net of tax		(56.6	)		(83.5	)
Accumulated other comprehensive losses	$	(394.6	)	$	(375.7	)

The before tax and after tax amounts of other comprehensive (loss) income for the years ended December 31, 2021, 2020, and 2019 are summarized below:

				*Tax Benefit*
	*Before Tax*			*(Expense)*			*After Tax*
December 31, 2021
Foreign currency translation adjustment attributable to Verisk	$	(45.8	)	$	—		$	(45.8	)
Foreign currency translation adjustment attributable to noncontrolling interests		(0.5	)		—			(0.5	)
Foreign currency translation adjustment		(46.3	)		—			(46.3	)
Pension and postretirement adjustment before reclassifications		39.8			(9.8	)		30.0
Amortization of net actuarial loss and prior service benefit reclassified from accumulated other comprehensive losses (1)		(4.1	)		1.0			(3.1	)
Pension and postretirement adjustment		35.7			(8.8	)		26.9
Total other comprehensive loss	$	(10.6	)	$	(8.8	)	$	(19.4	)
December 31, 2020
Foreign currency translation adjustment	$	107.9		$	—		$	107.9
Pension and postretirement adjustment before reclassifications		11.1			(2.9	)		8.2
Amortization of net actuarial loss and prior service benefit reclassified from accumulated other comprehensive losses (1)		(6.7	)		1.8			(4.9	)
Pension and postretirement adjustment		4.4			(1.1	)		3.3
Total other comprehensive income	$	112.3		$	(1.1	)	$	111.2
December 31, 2019
Foreign currency translation adjustment	$	88.4		$	—		$	88.4
Pension and postretirement adjustment before reclassifications	26.7				(6.4	)		20.3
Amortization of net actuarial loss and prior service benefit reclassified from accumulated other comprehensive losses (1)		(4.9	)		1.2			(3.7	)
Pension and postretirement adjustment		21.8			(5.2	)		16.6
Total other comprehensive income	$	110.2		$	(5.2	)	$	105.0


(1)	These accumulated other comprehensive loss components, before tax, are included under “Cost of revenues” and “Selling, general and administrative” in our accompanying consolidated statements of operations. These components are also included in the computation of net periodic (benefit) cost (See Note 18. Pension and Postretirement Benefits for additional details).

VERISK ANALYTICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

17. Compensation Plans:

KSOP

We have established the KSOP for the benefit of eligible employees in the U.S. and Puerto Rico. The KSOP includes both an employee savings component and an employee stock ownership component. The purpose of the combined plan is to enable our employees to participate in a tax-deferred savings arrangement under Internal Revenue Service Code Sections 401(a) and 401(k) (the “Code”), and to provide our employees equity participation through the employee stock ownership plan (“ESOP”) accounts.

Under the KSOP, eligible employees may make pre-tax and after-tax cash contributions as a percentage of their compensation, subject to certain limitations under the applicable provisions of the Code. The maximum pre-tax contribution that can be made to the 401(k) account as determined under the provisions of Code Section 401(g) is $19.5 thousand for 2021 and 2020 and $19.0 thousand for 2019. Certain eligible participants (age 50 and older) may contribute an additional $6.5 thousand on a pre-tax basis for 2021 and 2020 and $6.0 thousand for 2019. After-tax contributions are limited to 10.0% of a participant’s compensation. Effective January 1, 2019, we increased the matching contributions to 100.0% of the first 6.0% of the participant’s contribution. The 401(k) matching contributions under the KSOP for the years ended December 31, 2021, 2020, and 2019, were $33.7 million, $31.6 million, and $31.0 million, respectively; which, at our option, were funded in cash.

In 2005, we established the ISO Profit Sharing Plan (the “Profit Sharing Plan”), a defined contribution plan, to replace the qualified pension plan for all eligible employees hired on or after March 1, 2005. The Profit Sharing Plan is a component of the KSOP. Eligible employees participated in the Profit Sharing Plan if they completed 1,000 hours of service each plan year and were employed on December 31 of that year. We can make a discretionary contribution to the Profit Sharing Plan based on our annual performance. Participants vest once they have completed four years and 1,000 hours of service. For the years ended December 31, 2021, 2020, and 2019, there were no profit sharing contributions.

Equity Compensation Plans

On _May 19, 2021 (_the "Approval Date"), our shareholders approved the Verisk Analytics, Inc. 2021 Incentive Plan, which replaced the 2013 Incentive Plan for any new grants made after the Approval Date. As of the Approval Date, the number of shares of our common stock available for issuance under the 2021 Incentive Plan was 16,000,000, reduced by (i) one share for every one share that was subject to an option or stock appreciation right granted after December 31, 2020 and prior to the Approval Date under the 2013 Incentive Plan, and (ii) two and one-half shares for every one share that was subject to any award other than an option or stock appreciation right granted after December 31, 2020 and prior to the Approval Date under the 2013 Incentive Plan. All of our outstanding stock options, restricted stock, and PSUs are covered under our 2021 Incentive Plan, 2013 Incentive Plan, or 2009 Incentive Plan. Awards under our 2021 Incentive Plan may include one or more of the following types: (i) stock options (both nonqualified and incentive stock options), (ii) stock appreciation rights, (iii) restricted stock, (iv) restricted stock units, (v) performance awards, (vi) other share-based awards, and (vii) cash. Employees, directors, and consultants are eligible for awards under our 2021 Incentive Plan. We issued common stock under these plans from our treasury shares. We have granted equity awards to key employees and directors. The ultimate realization of the PSUs may range from 0% to 200% of the recipient’s target levels established on the grant date. As of December 31, 2021, there were 14,915,295 shares of common stock reserved and available for future issuance.

VERISK ANALYTICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

A summary of the status of the stock options, restricted stock, and PSUs awarded under our 2021 Incentive Plan as of December 31, 2021, 2020, and 2019 and changes during the years is presented below.

	Stock Option							Restricted Stock					PSU
											*Weighted*						*Weighted*
				*Weighted*							*Average*						*Average*
				*Average*		*Aggregate*					*Grant Date*						*Grant Date*
	*Number*			*Exercise*		*Intrinsic*		*Number*			*Fair Value*		*Number*				*Fair Value*
	*of Options*			*Price*		*Value*		*of Shares*			*Per Share*		*of Shares*				*Per Share*
						(in millions)
Outstanding at January 1, 2019		6,820,046		$	67.27	$	284.9		533,335		$	88.55		42,050			$	140.70
Granted		920,398		$	135.64				167,231		$	135.82		51,792			$	173.59
Dividend reinvestment		—		$	—				—		$	—		550				N/A
Exercised or lapsed		(1,131,970	)	$	51.20	$	101.0		(242,815	)	$	84.60		—			$	—
Canceled, expired or forfeited		(175,660	)	$	92.27				(29,022	)	$	109.72		(432	)		$	134.24
Outstanding at December 31, 2019		6,432,814		$	79.51	$	449.2		428,729		$	107.96		93,960			$	158.50
Granted		936,843		$	159.28				163,441		$	159.96		50,736			$	192.93
Dividend reinvestment		—		$	—				—		$	—		913				N/A
Exercised or lapsed		(1,623,740	)	$	56.83	$	189.8		(178,317	)	$	102.00		—			$	—
Canceled, expired or forfeited		(134,140	)	$	125.95				(23,799	)	$	124.40		—			$	—
Outstanding at December 31, 2020		5,611,777		$	98.28	$	613.4		390,054		$	131.63		145,609			$	170.75
Granted		750,822		$	189.29				162,378		$	189.23		59,144			$	210.07
Dividend reinvestment		—		$	—				—		$	—		980				N/A
Exercised or lapsed		(1,146,422	)	$	73.30	$	147.6		(173,726	)	$	120.94		(42,610	)		$	140.70
Canceled, expired or forfeited		(149,079	)	$	155.40				(27,202	)	$	157.79		—			$	—
Outstanding at December 31, 2021		5,067,098		$	115.73	$	572.6		351,504		$	161.33		163,123			$	192.99
Exercisable at December 31, 2021		3,173,592		$	89.14	$	443.0
Exercisable at December 31, 2020		3,494,164		$	76.84	$	456.9
Nonvested at December 31, 2021		1,893,506							351,504					163,123
Expected to vest at December 31, 2021		1,641,393							305,607					181,817		(1)

(1)	Includes estimated performance achievement

The fair value of our stock options granted was estimated on the date of grant using a Black-Scholes option valuation model that uses the weighted-average assumptions noted in the following table during the years ended December 31:

	*2021*			*2020*			*2019*
Expected volatility		23.66	%		18.48	%		18.76	%
Risk-free interest rate		0.39	%		1.51	%		2.25	%
Expected term in years		4.3			4.3			4.4
Dividend yield		0.63	%		0.71	%		0.80	%
Weighted average grant date fair value per stock option	$	35.15		$	25.87		$	24.13

VERISK ANALYTICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

A summary of the status of our nonvested options and changes are presented below:

			*Weighted Average Grant-Date Fair Value Per Share*
Nonvested balance at January 1, 2019	2,459,929		$	17.41
Granted	920,398		$	24.13
Vested	(947,708	)	$	17.29
Cancelled or expired	(175,660	)	$	17.77
Nonvested balance at December 31, 2019	2,256,959		$	20.17
Granted	936,843		$	25.87
Vested	(942,049	)	$	18.30
Cancelled or expired	(134,140	)	$	22.40
Nonvested balance at December 31, 2020	2,117,613		$	23.39
Granted	750,822		$	35.15
Vested	(825,850	)	$	21.62
Cancelled or expired	(149,079	)	$	27.54
Nonvested balance at December 31, 2021	1,893,506		$	28.49

Intrinsic value for stock options is calculated based on the exercise price of the underlying awards and the quoted price of our common stock as of the reporting date. Excess tax benefits of $35.9 million, $42.9 million, and $23.2 million from exercised stock options were recorded as income tax benefit in our accompanying consolidated statements of operations for the years ended December 31, 2021, 2020, and 2019, respectively. Stock-based compensation expense for the years ended December 31, 2021, 2020, and 2019 was $55.7 million, $47.6 million, and $42.7 million, respectively. As of December 31, 2021, the weighted average remaining contractual terms were 6.0 years and 4.8 years for outstanding and exercisable stock options, respectively. As of December 31, 2020, the weighted average remaining contractual terms were 6.0 years and 4.7 years for outstanding and exercisable stock options, respectively.

As of December 31, 2021, there was $88.0 million of total unrecognized compensation cost, exclusive of the impact of vesting upon retirement eligibility, related to nonvested share-based compensation arrangements granted under our 2021 and 2013 Incentive Plans. That cost is expected to be recognized over a weighted-average period of 2.3 years.

Our U.K. Sharesave Plan offers qualifying employees in the United Kingdom the opportunity to own shares of our common stock. Employees who elect to participate are granted stock options, of which the exercise price is equal to the average of the closing price on the five trading days immediately preceding the plan invitation date discounted by 5%, and enter into a savings contract, the proceeds of which are then used to exercise the options upon the three-year maturity of the savings contract. During the years ended December 31, 2021, 2020, and 2019, we granted 11,254, 8,174, and 18,713 stock options under the U.K. Sharesave Plan at a discounted exercise price of $166.16, $159.98, and $136.35, respectively. As of December 31, 2021, there were 451,207 shares of common stock reserved and available for future issuance under our U.K. Sharesave Plan.

We also offer eligible employees the opportunity to participate in an ESPP. Under our ESPP, participating employees may authorize payroll deductions of up to 20.0% of their regular base salary and up to 50.0% of their short-term incentive compensation, both of which in total may not exceed $25.0 thousand in any calendar year, to purchase shares of our common stock at a 5.0% discount of its fair market value at the time of purchase. In accordance with ASC 718, our ESPP is noncompensatory as the purchase discount is 5.0% or less from the fair market value, substantially all employees that meet limited employment qualifications may participate, and it incorporates no option features. During the years ended December 31, 2021, 2020, and 2019, we issued 33,974, 32,502, and 30,705 shares of common stock at a weighted average discounted price of $181.77, $164.44, and $141.17 respectively. As of December 31, 2021, there were 1,226,292 shares of common stock reserved and available for future issuance under our ESPP.

VERISK ANALYTICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

18. Pension and Postretirement Benefits:

We have a frozen qualified defined benefit pension plan for certain of our employees through membership in the Pension Plan for Insurance Organizations (the “Pension Plan”), a multiple-employer trust. Prior to the freeze, we applied a cash balance formula to determine future benefits. Under the cash balance formula, each participant has an account, which was credited annually based on salary rates determined by years of service, as well as the interest earned on the previous year-end cash balance. We also have a non-qualified frozen supplemental cash balance plan (“SERP”) for certain employees. Our SERP is funded from our general assets. We contributed $0.7 million to our SERP in 2021 and 2020, respectively, and expect to contribute $1.4 million in 2022.

Our Pension Plan’s funding policy is to contribute annually at an amount between the minimum funding requirements set forth in the Employee Retirement Income Security Act of 1974 and the maximum amount that can be deducted for federal income tax purposes. No minimum contribution requirement was and is expected for 2021 and 2022, respectively.

We also provide certain healthcare and life insurance benefits for both active and retired employees. The Postretirement Health and Life Insurance Plan (the “Postretirement Plan”), which has been frozen, is contributory, requiring participants to pay a stated percentage of the premium for coverage. We do not expect to contribute to our Postretirement Plan in 2022.

The following table sets forth the changes in the benefit obligations and the plan assets, the funded status of the Pension Plan, SERP, and Postretirement Plan, and the amounts recognized in our consolidated balance sheets at December 31:

	Pension Plan and SERP						Postretirement Plan
	*2021*			*2020*			*2021*			*2020*
Change in benefit obligation:
Benefit obligation at January 1	$	459.9		$	443.6		$	7.5		$	8.2
Interest cost		11.0			12.6			0.1			0.2
Actuarial (gain) loss		(9.0	)		32.1			(0.9	)		(0.2	)
Plan participants’ contributions		—			—			1.5			1.6
Benefits paid		(30.2	)		(28.4	)		(2.2	)		(2.3	)
Benefit obligation at December 31	$	431.7		$	459.9		$	6.0		$	7.5
Accumulated benefit obligation at December 31	$	431.7		$	459.9
Change in plan assets:
Fair value of plan assets at January 1	$	520.8		$	488.9		$	10.5		$	10.3
Actual return on plan assets, net of expenses		54.9			59.6			(0.2	)		0.3
Employer contributions, net		0.7			0.7			(0.1	)		0.6
Plan participants’ contributions		—			—			1.5			1.6
Benefits paid		(30.2	)		(28.4	)		(2.2	)		(2.3	)
Fair value of plan assets at December 31	$	546.2		$	520.8		$	9.5		$	10.5
Funded status at December 31	$	(114.5	)	$	(60.9	)	$	(3.5	)	$	(3.0	)
Amounts recognized in the consolidated balance sheets consist of:
Pension assets, noncurrent (1)	$	(127.0	)	$	(74.3	)	$	(3.5	)	$	(3.0	)
Pension, SERP and postretirement benefits, current (2)		1.4			1.0			—			—
Pension, SERP and postretirement benefits, noncurrent (3)		11.1			12.4			—			—
Total Pension, SERP and Postretirement benefits	$	(114.5	)	$	(60.9	)	$	(3.5	)	$	(3.0	)

(1) Included in "Other noncurrent assets" in our accompanying consolidated balance sheets

(2) Included in "Accounts payable and accrued liabilities" in our accompanying consolidated balance sheets

(3) Included in "Other noncurrent liabilities" in our accompanying consolidated balance sheets

VERISK ANALYTICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The pre-tax components included within accumulated other comprehensive losses as of December 31 are summarized below:

	Pension Plan and SERP				Postretirement Plan
	*2021*		*2020*		*2021*		*2020*
Prior service benefit cost (credit)	$	2.8	$	3.0	$	—	$	(0.1	)
Actuarial losses		98.3		133.2		2.4		3.1
Accumulated other comprehensive losses, pretax	$	101.1	$	136.2	$	2.4	$	3.0

The pre-tax components of net periodic benefit (credit) cost and the amounts recognized in other comprehensive loss are summarized below for the years ended December 31:

	Pension Plan and SERP									Postretirement Plan
	*2021*			*2020*			*2019*			*2021*			*2020*			*2019*
Interest cost	$	11.0		$	12.6		$	15.6		$	0.1		$	0.2		$	0.3
Expected return on plan assets		(32.8	)		(29.9	)		(30.3	)		(0.2	)		(0.2	)		(0.2	)
Amortization of prior service cost (credit) reclassified from accumulated other comprehensive losses		0.2			0.2			0.2			(0.1	)		(0.1	)		(0.1	)
Amortization of net actuarial loss reclassified from accumulated other comprehensive losses		3.8			6.3			4.5			0.2			0.3			0.3
Net periodic benefit (credit) cost		(17.8	)		(10.8	)		(10.0	)		—			0.2			0.3
Amortization of prior service (cost) credit reclassified from accumulated other comprehensive losses		(0.2	)		(0.2	)		(0.2	)		0.1			0.1			0.1
Amortization of actuarial loss reclassified from accumulated other comprehensive losses		(0.2	)		(0.2	)		(0.1	)		—			—			—
Net loss recognized reclassified from accumulated other comprehensive losses		(3.6	)		(6.1	)		(4.4	)		(0.2	)		(0.3	)		(0.3	)
Actuarial (gain) loss		(31.1	)		2.4			(16.4	)		(0.5	)		(0.3	)		(0.8	)
Total recognized in other comprehensive income		(35.1	)		(4.1	)		(21.1	)		(0.6	)		(0.5	)		(1.0	)
Total recognized in net periodic benefit credit and other comprehensive (income) loss	$	(52.9	)	$	(14.9	)	$	(31.1	)	$	(0.6	)	$	(0.3	)	$	(0.7	)

The weighted-average assumptions used to determine benefit obligations as of December 31, 2021 and 2020 and net periodic benefit (credit) cost for the years 2021, 2020 and 2019 are provided below:

	Pension Plan and SERP									Postretirement Plan
Weighted-average assumptions used to determine benefit obligations:	*2021*			*2020*						*2021*			*2020*
Discount rate		2.75	%		2.49	%					2.25	%		1.50	%
Expected return on plan assets		6.25	%		6.50	%					1.75	%		2.00	%
Cash balance interest credit rate		2.57	%		2.57	%					N/A

Weighted-average assumptions used to determine net periodic benefit (credit) cost:	*2021*			*2020*			*2019*			*2021*			*2020*			*2019*
Discount rate		2.49	%		2.83	%		3.82	%		1.50	%		2.50	%		3.75	%
Expected return on plan assets		6.50	%		6.75	%		7.00	%		2.00	%		2.00	%		2.00	%
Cash balance interest credit rate		2.57	%		2.57	%		2.57	%		N/A

VERISK ANALYTICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The following table presents the estimated future benefit payments for the respective plans. The future benefit payments for the Postretirement Plan are net of the federal Medicare subsidy.

	*Pension Plan*		Postretirement
	*and SERP*		Plan
	*Gross*		*Gross*		*Medicare*			*Net*
	*Benefit*		*Benefit*		*Subsidy*			*Benefit*
	*Amount*		*Amount*		*Payments*			*Amount*
2022	$	30.5	$	1.1	$	(0.2	)	$	0.9
2023	$	30.3	$	1.0	$	(0.2	)	$	0.8
2024	$	30.0	$	0.8	$	(0.1	)	$	0.7
2025	$	29.0	$	0.7	$	(0.1	)	$	0.6
2026	$	28.5	$	0.6	$	—		$	0.6
2027 and thereafter	$	132.5	$	2.0	$	—		$	2.0

The healthcare cost trend rate for 2021 was 7.75% gradually decreasing to 4.50% in 2035. Assumed healthcare cost trend rates have a significant effect on the amounts reported for the healthcare plan.

The subsidy benefit from the Medicare Prescription Drug, Improvement and Modernization Act of 2003 reduced our accumulated postretirement benefit assets by approximately $0.8 million as of December 31, 2021 and 2020. The subsidy cost increased the net periodic benefit cost by approximately $75.8 thousand, $58.2 thousand, and $48.5 thousand in fiscal 2021, 2020 and 2019, respectively.

The expected return on our Pension Plan assets as of December 31, 2021 and 2020 was 6.25% and 6.50%, respectively, which was determined by taking into consideration our analysis of our actual historical investment returns to a broader long-term forecast after adjusting for the target investment allocation and reflecting the current economic environment. During the first quarter of 2021, we changed the investment guidelines on our Pension Plan assets to target investment allocation of 50% to equity securities and 50% to debt securities from our previous target allocation of 55% to equity securities and 45% to debt securities as of December 31, 2020. Our Pension Plan assets consist primarily of investments in various fixed income and equity funds. Investment guidelines are established with each investment manager. These guidelines provide the parameters within which the investment managers agree to operate, including criteria that determine eligible and ineligible securities, diversification requirements and credit quality standards, where applicable. Investment managers are prohibited from entering into any speculative hedging transactions. The investment objective is to achieve a maximum total return with strong emphasis on preservation of capital in real terms.

The asset allocation at December 31, 2021 and 2020, and target allocation by asset category are as follows:

	*Target*			Percentage of Plan Assets
Asset Category	*Allocation*			*2021*			*2020*
Equity securities		50.0	%		45.8	%		52.5	%
Debt securities		50.0	%		47.8	%		40.0	%
Other		—	%		6.4	%		7.5	%
Total		100.0	%		100.0	%		100.0	%

We have used the target investment allocation to derive the expected return as we believe this allocation will be retained on an ongoing basis that will be commensurate with the projected cash flows of the plan. The expected return for each investment category within the target investment allocation is developed using average historical rates of return for each targeted investment category, considering the projected cash flow of our Pension Plan. The difference between this expected return and the actual return on plan assets is generally deferred and recognized over subsequent periods through future net periodic benefit costs. We believe that the use of the average historical rates of returns is consistent with the timing and amounts of expected contributions to the plans and benefit payments to plan participants. These considerations provide the basis for reasonable assumptions with respect to the expected long-term rate of return on plan assets.

VERISK ANALYTICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

We also maintain a voluntary employees beneficiary association plan (the “VEBA Plan”) under Section 501(c)(9) of the Internal Revenue Code to fund the Postretirement Plan. The asset allocation for our VEBA Plan at December 31, 2021 and 2020 was 100% in debt securities.

There were no transfers among Levels 1, 2, or 3 for the years ended December 31, 2021 and 2020. Refer to Note 7. Fair Value Measurements for further discussion with respect to fair value hierarchy. The following table summarizes the fair value measurements by level of our Pension Plan and Postretirement Plan assets:

				*Quoted Prices*		*Significant*
				*in Active*		*Other*
				*Markets for*		*Observable*
				*Identical Assets*		*Inputs*
	*Total*			*(Level 1)*		*(Level 2)*
December 31, 2021
Equity
Managed equity accounts (1)	$	195.0		$	195.0	$	—
Equity — pooled separate account (2)		54.9			—		54.9
Debt
Fixed income manager — separately managed account (5)		163.7			—		163.7
Fixed income manager — pooled separate account (2)		97.9			—		97.9
Fixed income manager — government securities (3)		9.5			9.5		—
Others
Cash — pooled separate account (2)		(0.1	)		—		(0.1	)
Global real estate account (4)		34.8			—		34.8
Total	$	555.7		$	204.5	$	351.2
December 31, 2020
Equity
Managed equity accounts (1)	$	206.3		$	206.3	$	—
Equity — pooled separate account (2)		67.2			—		67.2
Debt
Fixed income manager — pooled separate account (2)		208.3			—		208.3
Fixed income manager — government securities (3)		10.5			10.5		—
Others
Cash — pooled separate account (2)		2.1			—		2.1
Global real estate account (4)		36.9			—		36.9
Total	$	531.3		$	216.8	$	314.5


(1)	Valued at the closing price of shares for domestic stocks within the managed equity accounts, and valued at the net asset value (“NAV”) of shares for mutual funds at either the closing price reported in the active market or based on yields currently available on comparable securities of issuers with similar credit ratings for corporate bonds held by the Pension Plan in these managed accounts.


(2)	The pooled separate accounts invest in domestic and foreign stocks, bonds and mutual funds. The fair values of these stocks, bonds and mutual funds are publicly quoted and are used in determining the NAV of the pooled separate account, which is not publicly quoted.

(3)

The fund invested in the U.S. government, its agencies or instrumentalities or securities that are rated AAA by S&P, AAA by Fitch, or Aaa by Moody’s, including but not limited to mortgage securities such as agency and non-agency collateralized mortgage obligations, and other obligations that are secured by mortgages or mortgage backed securities, and valued at the closing price reported in the active market.


(4)	The funds invested in common stocks and other equity securities issued by domestic and foreign real estate companies, including real estate investment trusts ("REIT") and similar REIT-like entities. The fair values of these stocks, bonds and mutual funds are publicly quoted and are used in determining the NAV of the funds, which is not publicly quoted.

(5)	The separately managed accounts invest in U.S. Treasury Bonds and U.S. Treasury Separate Trading of Registered Interest and Principal of Securities (“UST STRIPS”). The fair values of these bonds and UST STRIPS are publicly quoted and are used in determining the NAV of the separately managed account, which is not publicly quoted.

VERISK ANALYTICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

19. Segment Reporting

ASC 280-10, Disclosures About Segments of an Enterprise and Related Information (“ASC 280-10”), establishes standards for reporting information about operating segments. ASC 280-10 requires that a public business enterprise reports financial and descriptive information about its reportable operating segments. Operating segments are components of an enterprise for which separate financial information is available that is evaluated regularly by the chief operating decision maker (“CODM”) in deciding how to allocate resources and in assessing performance. Our President and CEO is identified as the CODM as defined by ASC 280-10.

Each of our reportable segments, Insurance, Energy and Specialized Markets, and Financial Services has a portion of its revenue from more than one of the three revenue types described within the revenue recognition policy within Note 2. Basis of Presentation and Summary of Significant Accounting Policies. Below is the overview of the solutions offered within each reportable segment.

Insurance: We are the leading provider of statistical, actuarial, and underwriting data for the U.S. P&C insurance industry. Our databases include cleansed and standardized records describing premiums and losses in insurance transactions, casualty and property risk attributes for commercial buildings and their occupants, and fire suppression capabilities of municipalities. We use this data to create policy language and proprietary risk classifications that are industry standards and to generate prospective loss cost estimates used to price insurance policies, which are accessed via a hosted platform. We also develop solutions that our customers use to analyze key processes in managing risk. Our combination of algorithms and analytic methods incorporates our proprietary data to generate solutions. We also help businesses and governments better anticipate and manage climate and weather-related risks. In most cases, our customers integrate the solutions into their models, formulas or underwriting criteria in order to predict potential loss events, ranging from hurricanes to earthquakes. We develop catastrophe and extreme event models and offer solutions covering natural and man-made risks, including acts of terrorism. We further develop solutions that allow customers to quantify costs after loss events occur. Our multitier, multispectral terrestrial imagery and data acquisition, processing, analytics, and distribution system using the remote sensing and machine learning technologies help gather, store, process, and deliver geographic and spatially referenced information that supports uses in many markets. Additionally, we offer fraud-detection solutions including review of data on claim histories, analysis of claims to find emerging patterns of fraud, and identification of suspicious claims in the insurance sector. Our underwriting & rating, insurance anti-fraud claims, catastrophe modeling, and loss quantification are included in this segment. During the first quarter of 2021, due to management restructuring, our CODM reorganized AER, an immaterial component of the Energy and Specialized Markets segment, to the Insurance segment. Consequently, AER became part of the underwriting and rating category within the Insurance segment. The inclusion of AER within our Insurance segment better aligns with how our CODM makes operating decisions, assesses the performance of the business, and allocates resources. Our prior year results have been recast to reflect this change. The related impact to our consolidated financial statements was not material for all periods presented.

Energy and Specialized Markets: We are a leading provider of data analytics via hosted platform for the global energy, chemicals, and metals and mining industries. Our research and consulting solutions focus on exploration strategies and screening, asset development and acquisition, commodity markets, and corporate analysis in the areas of business environment, business improvement, business strategies, commercial advisory, and transaction support. We gather and manage proprietary information, insight, and analysis on oil and gas fields, mines, refineries, and other assets across the interconnected global energy sectors to advise customers in making asset investment and portfolio allocation decisions. Our analytical tools measure and observe environmental properties and translate those measurements into actionable information based on customer needs. In addition, we provide market and cost intelligence to energy companies to optimize financial results. We further offer a suite of data and information services that enable improved compliance with global Environmental Health and Safety requirements related to the safe manufacturing, distribution, transportation, usage, and disposal of chemicals and products. Our energy business and environmental health and safety services are included in this segment.

Financial Services: We maintain a bank account consortia to provide competitive benchmarking, decisioning algorithms, business intelligence, and customized analytic services that help financial institutions, payment networks and processors, alternative lenders, regulators, and merchants make better strategy, marketing, and risk decisions. Customers apply our solutions in the areas of tailored data management and media effectiveness that include business intelligence platforms, profile views, mobile data solutions, enterprise database services, and fraud risk scoring algorithms for marketing, fraud, and risk mitigation. In addition, our bankruptcy management solutions assist creditors, debt servicing businesses, and credit services to enhance regulatory compliance by eliminating stay violation and portfolio valuation risk.

The three aforementioned operating segments represent the segments for which discrete financial information is available and upon which operating results are regularly evaluated by our CODM in order to assess performance and allocate resources. We use EBITDA as the profitability measure for making decisions regarding ongoing operations. EBITDA is net income before interest expense, provision for income taxes, depreciation and amortization of fixed and intangible assets. EBITDA is the measure of operating results used to assess corporate performance and optimal utilization of debt and acquisitions. Operating expenses consist of direct and indirect costs principally related to personnel, facilities, software license fees, consulting, travel, and third-party information services. Indirect costs are generally allocated to the segments using fixed rates established by management based upon estimated expense contribution levels and other assumptions that management considers reasonable. We do not allocate interest expense and provision for income taxes, since these items are not considered in evaluating the segment’s overall operating performance. In addition, our CODM does not evaluate the financial performance of each segment based on assets. See Note 6. Revenues for information on disaggregated revenues by type of service and by country.

VERISK ANALYTICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

The following table provides our revenue and EBITDA by reportable segment for the years ended December 31, as well as a reconciliation of EBITDA to income before income taxes for all periods presented in our accompanying consolidated statements of operations:

	2021												2020												2019
	*Insurance*			*Energy and Specialized Markets*			*Financial Services*			*Total*			*Insurance*			*Energy and Specialized Markets*			*Financial Services*			*Total*			*Insurance*			*Energy and Specialized Markets*			*Financial Services*			*Total*
Revenues	$	2,206.9		$	648.9		$	142.8		$	2,998.6		$	2,008.7		$	619.2		$	156.7		$	2,784.6		$	1,885.4		$	543.7		$	178.0		$	2,607.1
Expenses:
Cost of revenues (exclusive of items shown separately below)		(704.4	)		(263.0	)		(90.4	)		(1,057.8	)		(644.3	)		(256.8	)		(92.8	)		(993.9	)		(654.1	)		(225.5	)		(97.2	)		(976.8	)
Selling, general and administrative		(239.1	)		(154.4	)		(29.2	)		(422.7	)		(248.1	)		(146.1	)		(19.7	)		(413.9	)		(407.9	)		(175.9	)		(19.7	)		(603.5	)
Other operating (loss) income		—			—			(134.0	)		(134.0	)		15.9			—			3.5			19.4			—			—			(6.2	)		(6.2	)
Investment income (loss) and others, net		2.3			(0.2	)		(0.2	)		1.9			(1.2	)		(1.2	)		—			(2.4	)		0.7			(1.9	)		(0.5	)		(1.7	)
EBITDA	$	1,265.7		$	231.3		$	(111.0	)		1,386.0		$	1,131.0		$	215.1		$	47.7			1,393.8		$	824.1		$	140.4		$	54.4			1,018.9
Depreciation and amortization of fixed assets											(206.9	)											(192.2	)											(185.7	)
Amortization of intangible assets											(176.7	)											(165.9	)											(138.0	)
Interest expense											(127.0	)											(138.2	)											(126.8	)
Income before income taxes										$	875.4											$	897.5											$	568.4

Long-lived assets by country are provided below as of December 31:

	*2021*		*2020*
Long-lived assets:
U.S.	$	3,527.6	$	3,525.0
U.K.		2,754.0		2,775.8
Other countries		623.9		466.8
Total long-lived assets	$	6,905.5	$	6,767.6

VERISK ANALYTICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

20. Related Parties:

We consider our stockholders that own more than 5% of the outstanding stock within the class to be related parties as defined within ASC 850, Related Party Disclosures. We had no material transactions with related parties owning more than 5% of the entire class of stock for the years ended December 31, 2021 and 2020.

In addition, we had no revenues from related parties for the years ended December 31, 2021, 2020, and 2019.

21. Commitments and Contingencies:

We are a party to legal proceedings with respect to a variety of matters in the ordinary course of business, including the matters described below. With respect to ongoing matters, we are unable, at the present time, to determine the ultimate resolution of or provide a reasonable estimate of the range of possible loss attributable to ongoing matters or the impact these matters may have on our results of operations, financial position, or cash flows. Although we believe we have strong defenses and intend to appeal any adverse rulings to us, we could in the future incur judgments or enter into settlements of claims that could have a material adverse effect on our results of operations, financial position, or cash flows.

Xactware Solutions, Inc. Patent Litigation

On October 8, 2015, we were served with a summons and complaint in an action titled Eagle View Technologies, Inc. and Pictometry International Group, Inc. v. Xactware Solutions, Inc. and Verisk Analytics, Inc. filed in the United States District Court for the District of New Jersey (the "Court" or “District Court”). The complaint alleged that our Roof InSight (now known as Geomni Roof), Property InSight product (now known as Geomni Property) and Aerial Sketch product in combination with our Xactimate product infringe seven patents owned by Eagle View and Pictometry namely, Patent Nos. 8,078,436 (the "436 patent"), 8,170,840 (the "840 patent"), 8,209,152 (the "152 patent"), 8,542,880 (the "880 patent"), 8,818,770 (the "770 patent"), 8,823,732 (the "732 patent"), and 8,825,454 (the "454 patent"). On November 30, 2015, plaintiffs filed a First Amended Complaint adding Patent Nos. 9,129,376 (the "376 patent") and 9,135,737 (the "737 patent") to the lawsuit. The First Amended Complaint sought an entry of judgment by the Court that defendants have and continue to directly infringe and/or indirectly infringe, including by way of inducement, the Patents-in-Suit, permanent injunctive relief, damages, costs and attorney’s fees. On May 19, 2017, the District Court entered a Joint Stipulated Order of Partial Dismissal with Prejudice dismissing all claims or assertions pertaining to the 880 and 732 patents, and certain asserted claims of the 436, 840, 152, 770, 454, 376 and 737 patents (collectively the "Patents in Suit"). Subsequently, Eagle View dropped the 152 patent and the 737 patent and reduced the number of asserted claims from the five remaining Patents in Suit to six asserted claims. On September 25, 2019, following a trial, the jury determined that we had willfully infringed the six asserted claims, and assessed damages in the amount of $125.0 million. After trial, Eagle View moved for a temporary restraining order ("TRO") and a permanent injunction preventing our sales of the Geomni Roof, Geomni Property and Aerial Sketch products in combination with Xactimate. The Court granted the motion for a TRO on September 26, 2019 and on October 18, 2019, issued an Order permanently enjoining our sales of the Geomni Roof, Geomni Property and Aerial Sketch products in combination with Xactimate. On March 2, 2020, the Court signed an Order staying execution of the $125.0 million judgment pending our appeal, and we subsequently secured a supersedeas bond in the amount of $137.5 million to satisfy the New Jersey court rule requiring a bond in the amount of 110% of the monetary judgment. In addition, Eagle View asked the Court to award enhanced damages by trebling the jury's damages award, together with attorneys' fees, costs, and pre- and post-judgment interest. We opposed all of Eagle View's requests and asked the Court for judgment as a matter of law and for a new trial. Eagle View opposed our requests. On September 9, 2020, the Court denied our motion seeking judgment as a matter of law and a new trial. We timely filed our Amended Notice of Appeal on October 8, 2020. Eagle View filed a motion to dismiss or deactivate the appeal for lack of appellate jurisdiction on November 4, 2020 which was denied by the Federal Circuit on December 15, 2020. We filed our appellate brief on December 24, 2020. On February 16, 2021, the Court granted Eagle View's motion for enhanced damages and attorneys' fees. The Court trebled the jury's award of $125.0 million, awarding enhanced damages for a total of $375.0 million, and also awarded Eagle View pre-judgment and post-judgment interest. The Court's award of Eagle View's attorneys' fees was limited to the period just before the commencement of trial through the trial, and did not include the earlier approximately four-year period in the case. On March 17, 2021, we filed an unopposed application with the Federal Circuit seeking consolidation of our appeals addressing the trial Court’s findings on infringement, the denial of our motion for judgment as a matter of law and a new trial, and the Court’s Order on enhanced damages. As of June 29, 2021, the appeal was fully briefed. Following the outcome of the trial in 2019, we established a $125.0 million reserve in connection with this litigation, which was included in selling, general and administrative expenses in our consolidated statements of operations for the year ended December 31, 2019. On April 15, 2021, the Court signed an order continuing the stay of execution of the monetary judgment. In light of the Court’s Order enhancing damages, we posted an additional bond in the amount of $305.0 million. On July 2, 2021, Eagle View sent us a cease and desist letter claiming that our Roof Underwriting Report (“RUR”) product infringes its asserted patents, and therefore, violates the trial court’s permanent injunction. On July 15, we responded with a letter denying infringement and violation of the injunction, and explaining how our RUR is vastly different from the asserted patents. On August 9, 2021, Eagle View filed a motion to initiate contempt proceedings against us for alleged violation of the injunction, seeking a Temporary Restraining Order prohibiting us from offering, marketing or selling our RUR and asking the court to grant discovery to assess our RUR and determine whether we were complying with the injunction. On October 8, 2021, the Federal Circuit Court of Appeals heard oral argument in our appeal. On November 5, 2021, the parties settled the entire litigation, thereby reversing the excess accrual amount. The Federal Circuit appeal was dismissed on November 9, 2021, and the District Court subsequently entered an Order dismissing the contempt action, as well as the parties’ underlying claims, counterclaims and defenses, and dissolving the permanent injunction. Upon a joint motion by both parties, on January 18, 2022, the Court entered an Order releasing the supersedeas bonds and discharging us and our sureties from any corresponding obligations.

VERISK ANALYTICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

ERISA Litigation

On September 24, 2020, former employees Jillyn Peterson, Gabe Hare, Robert Heynen and Adam Krajewski ("Plaintiffs"), filed suit in the United States District Court, District of New Jersey (No. 2:20-cv-13223-CCC-MF) against Defendants Insurance Services Office Inc. ("ISO"), the Plan Administration Committee of Insurance Services Office Inc. and its members ("Committee Defendants"), and the Trust Investment Committee of Insurance Services Office Inc. and its members. The class action complaint alleges violations of the Employee Retirement Income Security Act, ("ERISA"). The class is defined as all persons who were participants in or beneficiaries of the ISO 401(k) Savings and Employee Stock Ownership Plan ("Plan"), at any time between September 24, 2014 through the date of judgment. The complaint alleges that all defendants are fiduciaries with respect to the Plan. Plaintiffs challenge the amount of fees paid by Plan participants to maintain the investment funds in the plan portfolio and the amount of recordkeeper fees paid by participants. Plaintiffs allege that by permitting the payment of excessive fees, the Committee Defendants breached their ERISA duties of prudence and loyalty. Plaintiffs further allege that ISO breached its ERISA duty by failing to monitor the Committee Defendants who they allege committed known breaches of their fiduciary duties. The complaint does not specify damages but alleges the fiduciary breaches cost Plan participants millions of dollars. Defendants filed their motion to dismiss the complaint on January 12, 2021, which the Court partially denied on April 13, 2021. The parties are currently proceeding with discovery. At this time, it is not possible to reasonably estimate the liability related to this matter as the case is still in its early stages.

Jornaya Litigation

On December 10, 2020, we were served with a putative class action lawsuit brought by Erica Jackson in the Court of Common Pleas of Lackawanna County, Pennsylvania against Lead Intelligence, Inc. d/b/a Jornaya ("we" or "us"), Case No. 2020 CV 03695. The class complaint alleges that we violated Pennsylvania’s Wiretap Act ("PWA"), 18 Pa. Const. Stat. § 5701 et seq. by "wiretapping" and "intercepting" the plaintiff’s communications on the website colleges.educationgrant.com. The plaintiff alleges a class of all persons whose electronic communications were intercepted through the use of our wiretapping on the website. The complaint claims damages pursuant to the PWA for actual damages, but not less than liquidated damages computed at the rate of $100 a day for each day of violation, or $1,000, whichever is higher, punitive damages, and reasonable attorney's fees and other litigation costs. On February 16, 2021, we filed preliminary objections to the plaintiff’s complaint, the plaintiff opposed, and the Court ultimately denied our preliminary objections. We subsequently filed a petition to compel arbitration and a motion to stay this action pending the completion of the parties’ arbitration proceedings. On September 30, 2021, the court denied our motions and directed the parties to proceed with discovery. On October 8, 2021, we filed a Notice of Appeal to seek review of the lower court’s decision with the Pennsylvania appellate court system. At this time, it is not possible to reasonably estimate the liability related to this matter.

Financial Services Government Inquiry

We continue to cooperate with an inquiry by the civil division of the United States Attorney’s Office for the Eastern District of Virginia related to government contracts within our financial services segment. The inquiry is ongoing, we have voluntarily produced documents, and we cannot anticipate the timing, outcome or possible impact of the inquiry, financial or otherwise.

Breach of Contract Litigation

On April 2, 2021, Leica Geosystems ("Leica") and its subsidiary, Intergraph Corporation filed a lawsuit against Verisk Analytics and Geomni, Inc. ("we" "our" or "us") in the Circuit Court of Madison County, Alabama, titled Leica Geosystems AG, et al. v. Geomni, Inc., Verisk Analytics, Inc., Vexcel Imaging, Inc., et al. Co-Defendant, Vexcel Imaging, through its subsidiary, GV Air, is alleged to have breached a master lease agreement related to Leica’s aerial sensor units. The complaint further alleges breach of a license agreement for royalties earned from the sale of aerial imagery data, and breach of a mutual nondisclosure agreement related to the alleged disclosure of confidential information to co-defendant, Vexcel Imaging. Leica seeks compensatory and punitive damages, as well as attorney’s fees and costs. We filed a motion to dismiss the Plaintiffs’ claims and the hearing took place on January 7, 2022. At this time, it is not possible to reasonably estimate the liability related to this matter.

VERISK ANALYTICS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)

Wood Mackenzie Litigation

On August 10, 2021, S&P Global Inc. d/b/a Platts filed a lawsuit against Wood Mackenzie (“we,” “us,” or “our”) in the United States District Court for the Southern District of New York, titled S&P Global Inc. d/b/a Platts v. Wood Mackenzie Ltd., Civil Action No. 21-cv-6739. The Complaint alleges that our use of Platts’ data exceeded the scope of the applicable licensing agreement between the two parties. Platts seeks to recover actual damages as a result of the alleged breach of the agreement, attorney’s fees and costs, as well as injunctive relief requiring Wood Mackenzie to cease all use of its proprietary data. The deadline to file our responsive pleading was extended to March 11, 2022. At this time, it is not possible to reasonably estimate the liability related to this matter.

Data Privacy Litigation

On December 15, 2021, Plaintiff Jillian Cantinieri brought a putative class action against Verisk Analytics, Insurance Services Office and ISO Claims Services, Inc. (“we,” “our,” “us”) in the United States District Court for the Eastern District of New York, titled Cantinieri v. Verisk Analytics Inc., et al., Civil Action No. 2:21-cv-6911. The Complaint alleges that we failed to safeguard the personally identifiable information (PII) of Plaintiff and the members of the proposed classes from a purported breach of our databases by unauthorized entities. Plaintiff and class members allege actual and imminent injuries, including theft of their PII, fraudulent activity on their financial accounts, lowered credit scores, and costs associated with detection and prevention of identity theft and fraud. They seek to recover compensatory, statutory and punitive damages, disgorgement of earnings and profits, and attorney’s fees and costs. We filed our responsive pleading on February 7, 2022. At this time, it is not possible to reasonably estimate the liability related to this matter.

LCI Litigation

On December 30, 2021, Plaintiff William Norman Brooks filed a consumer class action lawsuit against Lundquist Consulting, Inc. (“LCI,” “us,” “we,” or “our”) in California Superior Court, San Matteo County, titled Brooks v. Lundquist Consulting, Inc., Case No. 21-CIV-06824. Plaintiff alleges violations of the Fair Credit Reporting Act, the California Consumer Credit Reporting Agencies Act, and California Unfair Competition Law, and Defamation. LCI has not yet been served with the Complaint. Plaintiff claims that LCI inaccurately reported Mr. Brooks as bankrupt, and that this caused emotional harm and harmed his credit standing, credit score and reputation. Plaintiff alleges that LCI’s statements about his (and other class members’) bankruptcies to third parties amounted to defamation. It is also alleged that LCI did not provide Plaintiff and others an opportunity to review and dispute any accuracies in the information sold by LCI about them and did not disclose their consumer credit files when asked. Plaintiff seeks to certify Nationwide Inaccuracy and Failure to Disclose Classes, as well as California Inaccuracy and Failure to Disclose Subclasses. He also seeks to recover actual and punitive damages, restitution of funds suspended and the value of credit privileges revoked or terminated, injunctive relief ordering LCI to rectify the credit reporting errors and change its procedures for attributing bankruptcy information, and reasonable attorney’s fees and costs. At this time, it is not possible to reasonably estimate the liability related to this matter.

22. Subsequent Events:

In December 2021, we entered into an additional ASR agreement with Citibank, N.A. to repurchase shares of our common stock for an aggregate purchase price of $100.0 million. Upon payment of the aggregate purchase price on January 4, 2022, we received an initial delivery of 360,913 shares of our common stock, representing approximately $80.0 million of the aggregate purchase price. Upon the final settlement of the ASR agreement in February 2022, we received an additional 141,766 shares, as determined by the volume weighted average share price of our common stock of $198.93 during the term of the ASR agreement. See Note 16. Stockholders' Equity for further discussion.

On January 12, 2022, our Board of Directors approved the action to make our environmental health and safety business within the Energy & Specialized Markets segment available for immediate sale at its current fair value. On January 21, 2022, we entered into a stock purchase agreement to sell 3E Company Environmental, Ecological and Engineering ("3E") in exchange for a potential aggregate cash consideration of up to $950.0 million. The purchase price consists of up to $630.0 million of cash consideration paid at closing, subject to customary purchase adjustments, up to $50.0 million of earnout payments based on financial performance in 2023 and 2024, and up to $270.0 million of additional deferred payments based on the buyer's future return on its investment.

In January 2022, we granted 608,895 nonqualified stock options, 130,555 shares of restricted stock, and 74,887 PSUs to key employees. The nonqualified stock options and restricted stock have a graded service vesting period of four years. The PSUs granted consisted of 49,533 TSR-based PSUs and 25,354 PSUs that are tied to the achievement of certain financial performance conditions, namely incremental return on invested capital (“ROIC-based PSUs”). Each of the TSR-based PSUs and ROIC-based PSUs have a three-year performance period, subject to the recipients' continued service. The grant date fair value of the ROIC-based PSUs is determined using the closing price of our common stock on the grant date. The related performance condition is driven by the incremental return on invested capital based on net operating profit. The ultimate realization of the PSUs may range from 0% to 200% of the recipient’s target levels established on the grant date. See Note 17. Compensation Plans for further discussion.

On February 11, 2022, we acquired 100 percent of the membership interest of Infutor Data Solutions, LLC ("Infutor"), for an aggregate net cash consideration of $223.5 million, of which $1.5 million represents a working capital escrow, plus a contingent earn-out payment of up to $25.0 million subject to the achievement of certain revenue and other performance targets. Infutor, a leading provider of identity resolution and consumer intelligence data, has become a part of the underwriting & rating category within our Insurance segment. We believe this acquisition further enhances Verisk’s marketing solutions offerings to companies across several industries including the insurance industry.

On February 16, 2022, our Board of Directors approved a cash dividend of $0.31 per share of common stock issued and outstanding, payable on March 31, 2022, to holders of record as of March 15, 2022. Our Board of Directors also approved an additional share repurchase authorization of $1,000.0 million.

On February 16, 2022, our Board of Directors approved the action to make our financial services business within the Financial Services segment available for immediate sale at its current fair value. On February 21, 2022, we entered into a stock purchase agreement to sell our financial services business to TransUnion, a global information and insights company, for $515.0 million in cash consideration paid at closing. This transaction is subject to customary closing conditions, including regulatory approvals and working capital adjustments.

Schedule II

Valuation and Qualifying Accounts and Reserves

For the Years Ended December 31, 2021, 2020, and 2019

(In millions)

	*Balance at*		*Charged to*
	*Beginning*		*Costs and*		*Deductions—*			*Balance at*
Description	*of Year*		*Expenses (1)*		*Write-offs (2)*			*End of Year*
Year ended December 31, 2021
Allowance for doubtful accounts	$	17.7	$	17.7	$	(14.1	)	$	21.3
Valuation allowance for income taxes	$	48.0	$	17.4	$	(1.3	)	$	64.1
Year ended December 31, 2020
Allowance for doubtful accounts	$	11.7	$	13.1	$	(7.1	)	$	17.7
Valuation allowance for income taxes	$	46.5	$	10.7	$	(9.2	)	$	48.0
Year ended December 31, 2019
Allowance for doubtful accounts	$	5.7	$	7.2	$	(1.2	)	$	11.7
Valuation allowance for income taxes	$	34.5	$	16.7	$	(4.7	)	$	46.5

	(1)	Primarily additional reserves for bad debts


	(2)	Primarily accounts receivable balances written off, net of recoveries, the expiration of loss carryforwards, and businesses held for sale

EXHIBIT INDEX

Exhibit Number	Description
3.1	Amended and Restated Certificate of Incorporation, incorporated herein by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K, dated May 29, 2015.

3.2	Amended and Restated By-Laws, incorporated herein by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K, dated February 15, 2019.

4.1	Form of Common Stock Certificate, incorporated herein by reference to Exhibit 4.1 to Amendment No. 6 to the Company’s Registration Statement on Form S-1, dated September 21, 2009.

4.2	Senior Notes Indenture, dated as of April 6, 2011, among Verisk Analytics, Inc., the guarantors named therein and Wells Fargo Bank, National Association, as Trustee, incorporated herein by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K, dated April 6, 2011.

4.3	First Supplemental Indenture, dated as of April 6, 2011, among Verisk Analytics, Inc., the guarantors named therein and Wells Fargo Bank, National Association, as Trustee, incorporated herein by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K, dated April 6, 2011.

4.4	Third Supplemental Indenture, dated as of September 12, 2012, among Verisk Analytics, Inc., the guarantors named therein and Wells Fargo Bank, National Association, as Trustee, incorporated herein by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K, dated September 12, 2012.

4.5	Fifth Supplemental Indenture, dated as of May 15, 2015, between Verisk Analytics, Inc. and Wells Fargo Bank, National Association, as Trustee, incorporated herein by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K, dated May 15, 2015.

4.6	Senior Notes Indenture, dated March 6, 2019, among Verisk Analytics, Inc. and Wells Fargo Bank, National Association, as Trustee, incorporated herein by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K, dated March 6, 2019.

4.7	First Supplemental Indenture, dated March 6, 2019, between Verisk Analytics, Inc. and Wells Fargo Bank, National Association, as Trustee, incorporated herein by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K, dated March 6, 2019.

4.8	Second Supplemental Indenture, dated May 13, 2020, between Verisk Analytics, Inc. and Wells Fargo Bank, National Association, as Trustee, incorporated herein by reference to Exhibit 4.1 to the Company's Current Report on Form 8-K, dated May 13, 2020.

4.9	Description of Verisk Analytics, Inc.’s securities registered pursuant to Section 12 of the Securities Exchange Act, incorporated herein by reference to Exhibit 4.8 to the Company's Annual Report on Form 10-K, dated February 18, 2020.

10.1	401(k) Savings Plan and Employee Stock Ownership Plan, incorporated herein by reference to Exhibit 10.1 to the Company’s Registration Statement on Form S-1, dated August 12, 2008.

10.2	Verisk Analytics, Inc. 2009 Equity Incentive Plan, incorporated herein by reference to Exhibit 10.2 to Amendment No. 6 to the Company’s Registration Statement on Form S-1, dated September 21, 2009.

10.3	Form of Letter Agreement, incorporated herein by reference to Exhibit 10.3 to Amendment No. 1 to the Company’s Registration Statement on Form S-1, dated October 7, 2008.

10.4	Form of Master License Agreement and Participation Supplement, incorporated herein by reference to Exhibit 10.4 to Amendment No. 1 to the Company’s Registration Statement on Form S-1, dated October 7, 2008.

Exhibit Number	Description
10.5	Schedule of Master License Agreements Substantially Identical in All Material Respects to the Form of Master License Agreement and Participation Supplement, incorporated herein by reference to Exhibit 10.5 to Amendment No. 2 to the Company’s Registration Statement on Form S-1, dated November 20, 2008.

10.6	Form of Change of Control Severance Agreement, incorporated herein by reference to Exhibit 10.8 to Amendment No. 6 to the Company’s Registration Statement on Form S-1, dated September 21, 2009.

10.7	Insurance Services Office, Inc. 1996 Incentive Plan and Form of Stock Option Agreement thereunder, incorporated herein by reference to Exhibit 10.9 to Amendment No. 7 to the Company’s Registration Statement on Form S-1, dated September 29, 2009.

10.8	Form of Stock Option Award Agreement under the Verisk Analytics, Inc. 2009 Equity Incentive Plan, incorporated herein by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q, dated November 16, 2009.

10.9	Insurance Services Office, Inc. Supplemental Cash Balance Plan dated January 1, 2009 as amended by the Amendment to the Insurance Services Office, Inc. Supplemental Cash Balance Plan dated February 10, 2012 incorporated by reference to Exhibit 10.12 to the Company's annual report on Form 10-K dated February 25, 2014.

10.10	Insurance Services Office, Inc. Supplemental Executive Retirement Savings Plan dated January 1, 2009 incorporated by reference to Exhibit 10.13 to the Company's annual report on Form 10-K dated February 25, 2014.

10.11	Verisk Analytics, Inc. 2013 Equity Incentive Plan, incorporated herein by reference to Appendix A to the Company's Proxy Statement on Schedule 14A, dated April 1, 2013.

10.12	Form of Stock Option Award Agreement under Verisk Analytics, Inc. 2013 Equity Incentive Plan, incorporated herein by reference to Exhibit 99.2 to Company’s Registration Statement on Form S-8 dated May 15, 2013.

10.13	Form of Restricted Stock Award Agreement under Verisk Analytics, Inc. 2013 Equity Incentive Plan, incorporated herein by reference to Exhibit 99.3 to Company’s Registration Statement on Form S-8 dated May 15, 2013.

10.14	Second Amended and Restated Credit Agreement dated April 22, 2015 among Verisk Analytics, Inc., as borrower, and the lenders and agents party thereto, incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated April 24, 2015.

10.15	First Amendment to Second Amended and Restated Credit Agreement dated July 24, 2015 among Verisk Analytics, Inc., as borrower, and the lenders and agents party thereto, incorporated herein by reference to Exhibit 10.2 to the Company’s quarterly report on Form 10-Q dated July 28, 2015.

10.16	Second Amendment to the Second Amended and Restated Credit Agreement dated May 26, 2016 among Verisk Analytics, Inc., as borrower, and the lenders and agents party thereto, incorporated herein by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K dated May 26, 2016.

10.17	Third Amendment to the Second Amended Restated Credit Agreement dated May 18, 2017 among Verisk Analytics, Inc., as borrower, and the lenders and agents party thereto, incorporated herein by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K dated May 19, 2017.

10.18	Fourth Amendment dated August 15, 2019 to the Second Amended and Restated Credit Agreement dated April 22, 2015 among Verisk Analytics, Inc., as borrower, and the lenders and agents party thereto, incorporated herein by reference to Exhibit 10.18 to the Company’s Current Report on Form 8-K, dated August 16, 2019.

Exhibit Number	Description
10.19	Verisk Analytics, Inc. 2021 Equity Incentive Plan incorporated herein by reference to Appendix B to the Company's Proxy Statement on Schedule 14A dated April 2, 2021.

10.20	Purchase Agreement, dated as of January 21, 2022, by and among Verisk Analytics, Inc., Tamarack Buyer, L.L.C. and, solely for the limited purpose set forth therein, 3E Company Environmental, Ecological and Engineering, incorporated herein by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K, dated January 24, 2022.

21.1	Subsidiaries of the Registrant.*

23.1	Consent of Deloitte & Touche LLP.*

31.1	Certification of the Chief Executive Officer of Verisk Analytics, Inc. pursuant to Rule 13a-14 under the Securities Exchange Act of 1934.*

31.2	Certification of the Chief Financial Officer of Verisk Analytics, Inc. pursuant to Rule 13a-14 under the Securities Exchange Act of 1934.*

32.1	Certification of the Chief Executive Officer and Chief Financial Officer of Verisk Analytics, Inc. pursuant to 18 U.S.C. Section 1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.*

101.INS	Inline XBRL Instance Document.*

101.SCH	Inline XBRL Taxonomy Extension Schema.*

101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase.*

101.DEF	Inline XBRL Taxonomy Definition Linkbase.*

101.LAB	Inline XBRL Taxonomy Extension Label Linkbase.*

101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase.*

104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).*


*	Filed herewith.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on February 22, 2022.

	VERISK ANALYTICS, INC. (Registrant)

	/S/ Scott G. Stephenson
	Scott G. Stephenson
	*President and Chief Executive Officer*

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities indicated on February 22, 2022.

Signature		Capacity

/S/ SCOTT G. STEPHENSON		President and Chief Executive Officer (principal executive officer and director)
Scott G. Stephenson

/S/ LEE M. SHAVEL		Chief Financial Officer and Group President
Lee M. Shavel		(principal financial officer)

/S/ DAVID J. GROVER		Controller and Chief Accounting Officer
David J. Grover		(principal accounting officer)

/S/ CHRISTOPHER M. FOSKETT		Lead Independent Director
Christopher M. Foskett

/S/ ANNELL BAY		Director
Annell R. Bay

/S/ VINCENT BROOKS		Director
Vincent K. Brooks

/S/ BRUCE E. HANSEN		Director
Bruce E. Hansen

/S/ KATHLEEN HOGENSON		Director
Kathleen A. Hogenson

/S/ CONSTANTINE P. IORDANOU		Director
Constantine P. Iordanou

/S/ LAURA K. IPSEN		Director
Laura K. Ipsen

/S/ SAMUEL G. LISS		Director
Samuel G. Liss

/S/ THERESE M. VAUGHAN		Director
Therese M. Vaughan

/S/ DAVID B. WRIGHT		Director
David B. Wright

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